New to pensions

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
1 reply 1.2K views
Tim_D_2Tim_D_2 Forumite
3 Posts
Hi all

I've started a new job and they have a company pension scheme. I've never had a pension and don't know the first thing about them, all I know is that some people have been paying into pensions for years only to find out they are worthless! Also heard on the news that most of the top 100 pension companies have a huge debt? First question is.... are they safe?

My company one is Scottish Mutual's 'Universal' Group Personal Pension. I'm 25 and would have to pay 3% of my salary into it while the company pays 5%. 100% of the contributions (both mine and employer's) will be used to buy units in funds and investments will be made in the following proportions: 100% in Growth. There is a 1%/year charge for the fund selected. HELP!

They want to know if I should contract out? My friend advised me not to at the moment as there is little benefit to be gained in contracting out.

Also I have to choose where to invest, I can choose up to 10 funds to invest in? Where should I choose and how much (%).

ANY advice would be very useful.

Thanks in advance.

Tim ???


  • dunstonhdunstonh Forumite
    106.7K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    You should point out to your friend that he has just broken the law by giving you financial advice. However, 95% of people shouldnt be contracted out at the moment so he has a good chance of being right.

    You are not being offered a company pension scheme so none of the things you are concerned about are applicable. You are being offered a group personal pension. Its free money so take them up on their offer. This pension will not be sufficient by itself as its only 8% of your income and you should be looking at 15% but its better than nothing.

    Fund selection is a personal thing that depends on your view of investment risk. You should select a range of funds which match your risk profile.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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