Can a lower earner have a private pension?

cashbackproblems

dunstonh wrote: »

Seeing as Virgin is about the worst option out there then pretty much every other pension is better.


No. Jupiter is a fund house. Their funds are made available in some pensions.



Similar but not the same. The pension is "more" tax free than the ISA. The pension doesnt form part of your estate (so no IHT) plus it gets tax relief on contributions.




Picking just one fund (unless its a diverse self balancing fund) is a risky business. Its eggs all in one basket.

Thanks, however im still abit confused as to how people choose which fund or pension to go for given so many options!

Out of interest who do you have your personal pension with,? do you judge a provider simply on the annaul charge, what about performance, or long term do all of them provide good increases?

http://investing.thisismoney.co.uk/fund_browse?action=performance_table_view

cashbackproblems

jamesd wrote: »

The HSBC fund can be held in either an ISA or the pension at Hargreaves Lansdown. Same cost whechever one it's used within.

The HSBC and Virgin funds invest in the same way and have essentially the same performance before charges. That's forced, because they are both trying to produce the same result as holding the companies in the FTSE All Share Index. Historic growth is capital plus dividends, yes.

Jupiter is a fund management company that offers may different funds. The Jupiter Merlin part of that range is a selection of funds that are good for inexperienced investors. They are available at Hargreaves Lansdown and other places, both inside a pension and inside an ISA.

You're a little confused here. The pension and the ISA are both tax wrappers that can hold funds. The HSBC fund or the Virgin fund are two funds that can be held within a pension or ISA. If you put money into the Virgin pension it goes into the Virgin fund as well. With Hargreaves Lansdown you have the pension and can choose which funds you want to use, you're not limited to just one.

It would be better to use several different funds.

If there were no other advantages, just 20% back at the start and taken off at the end there would be no gain or loss from having it off for those 40 years. It's the lump sum and personal allowance at the end that gives the advantage, by reducing how much tax you do pay when you take it out.

ahh thanks that is abit clearer, so say u invest in that fund as a pension, do the govt still subsidise it by 20 pounds for every 80? And when u call it a pension does it mean u cant withdraw it earlier than 55 and im guessing even tho its a pension it doesnt pay out weekly and instead a lump sum?

I understand buying that fund in an isa for example just abit confused about you calling it a pension. As when you try applying for the account it only gives u option to open it in these formats.

Open an ISA for this tax year
Open a new Fund Account
Open a SIPP

dunstonh

however im still abit confused as to how people choose which fund or pension to go for given so many options!

They either use an FA, use an IFA, research themselves or just take a random punt and hope for the best.

Out of interest who do you have your personal pension with,?

Skandia Invesmtent Solutions. However, whats right for me isnt necessarily right for you. I set up around 250 pensions a year. They are with a range of providers as there is no one best option. You can eliminate some plans easily. i.e. Virgin, supermarket sold plans, those sold by the banks etc. However, when it comes to "best" advice then it requires knowledge and research. If you dont want best but better than average then avoiding those ones is a good start.

do you judge a provider simply on the annaul charge

No. Although it certainly has an impact but its a secondary issue. example, would you rather a return 9% after charges of 1.5% or 7% after 0.25% charges?

what about performance, or long term do all of them provide good increases?

pensions dont make or lose money. Where you invest does that. If you invest in an area with limited growth potential then you will not make much money. However, if you are not experienced enough to pick investments, you can do more damage than good by picking experienced investor options.

Even if the Virgin pension was 0.2% p.a. I would not pick it. It's investment fund is too limited and doenst have enough diversification.