Pensions, Where do i start!

adrstuart

Hi,

I just turned 21 and im interested in investing in my future.

I have obviously heard and read about both Pensions and ISA's

Im very confused in what to do now and who to go with as it will have to be a personal pension as my employer does not contribute.

Has anyone got advice on what i should do, as i do realise its a good idea to start early but i would like to make sure i do it right and if need be with a good provider.

dunstonh

Im very confused in what to do now and who to go with as it will have to be a personal pension as my employer does not contribute.

Your options are ISA, stakeholder and personal pension. You can eliminate SIPP as that is the experienced investor option and its more expensive for small funds.

Has anyone got advice on what i should do, as i do realise its a good idea to start early but i would like to make sure i do it right and if need be with a good provider.

Any local IFA should be able to help you. Avoid the banks.

bendix

adrstuart wrote: »

Hi,

I just turned 21 and im interested in investing in my future.

I have obviously heard and read about both Pensions and ISA's

Im very confused in what to do now and who to go with as it will have to be a personal pension as my employer does not contribute.

Has anyone got advice on what i should do, as i do realise its a good idea to start early but i would like to make sure i do it right and if need be with a good provider.

At 21, whatever you do, you will be doing right. Even the things you do wrong can be changed, given you are starting so early.

The most important thing is coming to the decision to do something.

EdInvestor

I would suggest you start with the stocks and shares ISA, as you can always transfer it into a pension to pick up the tax relief later on, whereas you can't do it the other way round.

Use a discount broker to keep costs down and start learning about investment.
https://www.h-l.co.uk is a popular provider.

Check how much you're accumulating via your NI in the 2 state pensions by asking for a forecast here:

https://www.thepensionservice.gov.uk

adrstuart

EdInvestor wrote: »

I would suggest you start with the stocks and shares ISA, as you can always transfer it into a pension to pick up the tax relief later on, whereas you can't do it the other way round.

Use a discount broker to keep costs down and start learning about investment.
*link removed* is a popular provider.

Check how much you're accumulating via your NI in the 2 state pensions by asking for a forecast here:
*link removed*

Thanks for the replies.

I have been reading alot about both.

Let me know if this is not a good idea, but i think what i will do is start a stakeholders pension. (Virgin seem to do a good one?) I will make the payments smallish say arounf £10 to start with. Payments go up 10% each year but i can change, stop, resume etc at any time.

I will also put some money aside to start up a stocks and shares ISA this im not 100% sure of yet as i dont know alot about it but will continue to read up on it all.
:D

jem16

adrstuart wrote: »

Let me know if this is not a good idea, but i think what i will do is start a stakeholders pension. (Virgin seem to do a good one?)

The Virgin stakeholder is about the worst you can find.

I will make the payments smallish say arounf £10 to start with. Payments go up 10% each year but i can change, stop, resume etc at any time.

£10pm will not get you much of a pension.

Aegis

adrstuart wrote: »

I will make the payments smallish say arounf £10 to start with. Payments go up 10% each year but i can change, stop, resume etc at any time.

Following this plan you will only be paying about £67 per month after 20 years. I think you badly need to think about increasing that annual increase, as only paying in the amounts you're talking about will make your retirement planning situation very difficult in a few years time.

dunstonh

Virgin seem to do a good one?

Apart from it being amongst the worst available currently (as are their ISAs)

I will make the payments smallish say arounf £10 to start with.

I wouldnt bother with £10pm. Get it to £20 with annual indexation and at your age it can make a difference.

To give you an idea of how £10 stacks up, most of the best pensions wont take contributions of less than £100pm. Even the stakeholder minimum is £20 (to comply with rules) and that was set 10 years ago and has never been revised upwards.

sandsy

At your age, if you invest about 8-10% of salary through your lifetime in a pension, you should end up with a decent pension fund.