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

fertyskids

Hi Dunstonh

its Skandia Life ???

thankyou so much for taking the time to respond... i feel a bit more reassured.

i dont want to do it cheap if i actually loose out in the long term..

Dickie_Greenfield

I have a total of 7 funds currently invested in an occupational pension scheme and wish to research their performance, ratings and future prospects from respected professionals/financial agencies.

I have the option of switching funds if necessary.

Can anyone please advise which free website can give me independent and reliable information for any fund and if this is also presented in simple and clear terms?

I have a reasonable level of understanding regarding my financial affairs and am not looking for investment advice, simply a reputable source presented in an easy to read format. Am I asking for too much?!

Thank you

dunstonh

Can anyone please advise which free website can give me independent and reliable information for any fund and if this is also presented in simple and clear terms?

You probably have institutional funds which do not pass data to third parties (or not supply it for use as free data). You could look for the retail version but that will not be quite like for like.

Trustnet is probably about the best free version you can get. Its cut down from the larger retail version but its still very good.

mycatbetty

Hi all

new to this...but making such important decision and article useful, so here goes.

I've always been in a company scheme - 3 separate money purchase schemes, but have now joined employer with no scheme, but will pay matched contributions. Am late in setting up scheme, so have lump sum plus regular payments - total 20% of salary+ the lump sum.

been in contact with 2 IFAs, but can't believe how much will come off in fees/charges over the next 20 years. After reading the article, it seems that a/the sensible thing is to buy an Aviva stakeholder, through Cavendish - go for whatever their middle of the road fund for a 44 year old is, as i can easily switch funds if i want to. - Key thing is to get this up and running, and I hate the thought of all that money going in fees and charges for not much, if any, difference in management.

Does it seem like i understand the position? All comments gratefully received.

thanks
mycatbetty

dunstonh

After reading the article, it seems that a/the sensible thing is to buy an Aviva stakeholder, through Cavendish

Not bad as stakeholders go but pretty easy for an IFA to beat that on charges over 20 years.

but can't believe how much will come off in fees/charges over the next 20 years.

Are you looking at it in todays money terms or future money terms? Many people look at the illustrations, see big figures and relate to them as if that is the cost in todays spending power. They forget to apply inflation to those figures.

Rob82

Hello,

I'm 28 and want to start thinking about putting money away into a pension scheme.

I've read through a lot of the posts on this thread and it seems people have mixed opinions, which has left me quite confused.

Perhaps someone can offer me some good advice. I am self employed, and run a small Ltd company, however we have not set up a pension scheme for the company as there is just two of us. Currently we are paying ourselves dividends each month and a lower salary to avoid higher taxes.

Some people are saying to just put money into a high interest savings account, others are saying to use a pension scheme. What is the best solution for the long term? I don't mind putting £200 away per month, just not sure who to put it with! A bank? A pension scheme? Help!

Thanks in advance.

Rob

dunstonh

I am self employed, and run a small Ltd company

You are not self employed. It makes a difference as self employed dont get S2P but employed under a limited company you do (subject to NI).

however we have not set up a pension scheme for the company as there is just two of us.

Although you will have to soon as it will be required by law. (not for self employed though but will for limited companies)

Some people are saying to just put money into a high interest savings account,

If that is their answer to long term retirement planning then that is pretty awful.

What is the best solution for the long term? I don't mind putting £200 away per month, just not sure who to put it with! A bank? A pension scheme? Help!

A pension allows you to take money out of the business without paying NI and income tax on it (its a business expense). A savings account will have to come out of your money after tax and NI. Plus, savings accounts leave you with inflation risk and shortfall risk in a way that is not likely with a pension.

£200 is not a bad starting level for a 28 year old. However, remember to keep it increasing each year. Many people make the mistake at starting at a level and leaving it at that. £200 is good now but in 10 years or 20 years time it willl be low (e.g. £30-£50 was considered a good contribution in 1988. Its naff all now and many providers have their minimums at £100-£150. Some even at £300)

JamesU

Rob82 wrote: »

however we have not set up a pension scheme for the company as there is just two of us.
Rob

dunstonh wrote: »

Although you will have to soon as it will be required by law. (not for self employed though but will for limited companies)

Dunstonh, this has me confused. Could you clarify what is pending here regarding future legislation? As far as I understood, there is no requirement for small companies with under 5 employees to set up a pension (e.g. stakeholder)? Or are you referring to future NEST in which case is there not the option to opt out anyway?

Update: just had a different thought...maybe the company is obliged to provide or "offer the opportunity" of a NEST pension but the employees (i.e. two people in the company) then decline to pursue it by opting out?

JamesU

dunstonh

Dunstonh, this has me confused. Could you clarify what is pending here regarding future legislation? As far as I understood, there is no requirement for small companies with under 5 employees to set up a pension (e.g. stakeholder)? Or are you referring to future NEST in which case is there not the option to opt out anyway?

The soon to be abolished (and no longer enforced) stakeholder rule of 5 employees is what you are thinking of. NEST (or scheme matching contribution levels of NEST) will apply to even just 1 person being employed. The person can opt out though. If the directors are the only ones then its pointless using NEST as directors of a business are unlikely to want to use such a basic contract.

JamesU

dunstonh wrote: »

The soon to be abolished (and no longer enforced) stakeholder rule of 5 employees is what you are thinking of. NEST (or scheme matching contribution levels of NEST) will apply to even just 1 person being employed. The person can opt out though. If the directors are the only ones then its pointless using NEST as directors of a business are unlikely to want to use such a basic contract.

Yes, that makes sense. Question is whether directors that do not have a pension set up within their company will be obliged to set up NEST administratively, only then to opt out of it by choice. Presumably this is an unlikely scenario given directors are officers of the company, and not necessarily employees of the company (albeit classified this way for certain tax purposes). Yet more confusion.

JamesU