First job and joining pension scheme

dunstonh

I assume you have googled the "New Generation Personal Pension" and therefore have further information.

I am assuming its the Friends Provident NGP. NGP isnt a generic term but one of the FP ranges of pensions is called New Generation Personal Pension (they also have a new generation stakeholder pension as well). The FP NGP did allow for an initial charge on the contribution. However, most were done on a mono charged basis. In those cases, the illustrations did show the remuneration being paid. If read incorrectly, it could be read as a charge when its actually the remuneration (paid out of the 1% AMC and not in addition to). Part of the problem with illustrations is that remuneration and charges are not often the same but easy to get confused if you dont know what you terminology means.

Or it could be a totally different product that just happens to have the same name

MaryMay

Thank you everyone butI am getting confused now.
It is a Friends Provident pension.
The contribution is 5% of her salary and the employer pays 7.5%
Payments invested 50% managed and 50% Stewardship managed, unless you choose otherwise.
The AMC meets the cost of managing the plan and the investments, the charge is 1% and taken by cancelling units, from each fund invested in, over the lifetime of the plan.There are no additional expenses
One last thing, it says WARNING - one effect of charges is that you may get back less than you have paid in, particularly if you transfer during the early years. As regards to that, she will presumably stop paying in when she changes her employer but would not transfer the fund unless advised to.
I am sure there are other ways to save for retirement but surely none other than a pension where your employer pays more than you do?

dunstonh

The AMC meets the cost of managing the plan and the investments, the charge is 1% and taken by cancelling units, from each fund invested in, over the lifetime of the plan.There are no additional expenses

This is their standard mono charged plan then and confirms that there are no contribution charges as suggested in post #1.

One last thing, it says WARNING - one effect of charges is that you may get back less than you have paid in, particularly if you transfer during the early years. As regards to that, she will presumably stop paying in when she changes her employer but would not transfer the fund unless advised to.

Thats just a technical warning and should be ignored as its effectively saying that if you get less than 1% a year growth, you will get back less than paid in.

I am sure there are other ways to save for retirement but surely none other than a pension where your employer pays more than you do?

No brainer. Employer free money vs nothing.

margaretclare

I am sure there are other ways to save for retirement but surely none other than a pension where your employer pays more than you do?

No, absolutely. I am surprised you and your daughter are still unsure about this. Turning this down is like refusing a pay rise. There's also the tax relief which is valuable.

MaryMay

Thanks to all for your contribution to this discussion.
I have been sure about it since the beginning but when it is not your money you are spending its best to get another opinion and you have answered all my questions.
Thank you all for confirming it is the best thing to do.