Pension MoneySaving: Buy a different way to boost returns Article Discussion Area

darren1710

Hello, this is my first time commenting on here. I read the article because i need help with a pension. Im 25 and at university. I think i wont be on a full wage till im 30 but im currently saving £50 a month for long term. I just wanted ideas on waht to do really... do i set up a pension now or invest in something else as its only a small amount of money??

Thanks for your help if u reply =]

skintdragon

:mad:

can anyone advise?

I have been reading Martin's article on pensions and wouldn't mind a nudge in the right direction.

Before I left the NHS near end of 2008 I had been making automatic pension contributions to a pension scheme for just under 10 years... As I now work in the oil and gas industry the company I work for does not offer a pension scheme, which I find frustrating. So at this present time I am looking into the different types of products available on the market... this is where your advice comes in.

I would contact an IFA but I feel the need to arm myself with some basic knowledge. Call me a bit dim but I seem to be more confused than ever before. Can someone help explain the fundamentals in the simplest of terms please?? I am flummoxed by the things in relation to stakes and shares- all sounds really grown up!

In the meantime I am going to read the article again and see if reading it several times will help me understand the basics.

Thanks in advance. :laugh:

dunstonh

can anyone advise?

no. the board is not authorised to give advice. Discussion and comment only.

Can someone help explain the fundamentals in the simplest of terms please?? I am flummoxed by the things in relation to stakes and shares- all sounds really grown up!

A pension is just a tax wrapper. A container in which you put your investments in. There are different types of containers which allow different options or have different criteria. A stakeholder pension is a basic option which has a limited range of investments. Typically in-house/own-brand investments only. It has a structured charging method which may or may not be the cheapest option. A personal pension allows a greater choice of charging methods. Some will be cheaper than stakeholder. Some more expensive. Personal pensions also offer a wider range of investment funds. Typically the same stakeholder funds as well as a range of externally managed funds. Finally you have the SIPP. This is typically the most expensive option for funds but allows you full whole of market access to investments, not just funds but also shares and other direct assets. Its really geared to the experienced investor. So, I think its fair to eliminate that option.

So, that would leave you with stakeholder pension and personal pension. Its impossible to say which will be best to you without knowing more about you. That is where the IFA will come in.

skintdragon

Sorry I used the word "advise" loosely; I was after clarification...

That's great; thanks for your reply.

TheLearner2008

Hi there,

I have a private Pension with Axa and the Financial Adviser is Sable Wealth.

I have never met the guy - how do I know that I am not getting ripped off - being overcharged with fees etc? All that I know is its 1% charge?!

Help!

dunstonh

how do I know that I am not getting ripped off

See an IFA and ask for a cost analysis compared to modern plans.

ll that I know is its 1% charge?!

which suggests you have a basic product paying the basic charge. (1% amc is the stakeholder default). You are not being ripped off or even close to being ripped off. You are paying the going rate for a simple product with simple investments.

I have a private Pension with Axa and the Financial Adviser is Sable Wealth.

I have never met the guy

Is that how you like it? Is that the service you want or choose? Some people do, some don't.

TheLearner2008

dunstonh wrote: »

See an IFA

Thanks mate but how does an IFA work? Surely they are just going to try and charge me or sell me something?

Harry_Powell

TheLearner2008 wrote: »

Thanks mate but how does an IFA work? Surely they are just going to try and charge me or sell me something?

Nah, they work for free, out of community spirit, like.

dunstonh

TheLearner2008 wrote: »

Thanks mate but how does an IFA work?

Finds out your situation and needs and objectives and make sure what you have matches that.

Surely they are just going to try and charge me or sell me something

No-one works for free. And why should they. If everyone did then no-one would be paid a wage.

However, charges dont always cost more. For example, it may cost you £1000 to switch pension provider. However, if that saves you £500 a year in charges and have 20 years to retirement, that is £10,000 saved.

TheLearner2008

dunstonh wrote: »

Finds out your situation and needs and objectives and make sure what you have matches that.

Thanks for your response. So at the end of the day I am going to have to put my trust in someone, unless I become a Financial Adviser myself? Because an Independent Financial Advisor is obviously going to push his products. I would be very surprised if he told me - you're current pension is perfect for you!