pension newbies

xirokx

Hi,

we are a couple aged 30 we would like to get a pension each not a joint pension

we would like to start paying into a pension we both currently have ISA's

we have a host of questions we hoped you guys could help with as we do not know anything about pensions:

- whats the best pension? is there a best type?
- what shall we look for when considering who to go with?
- is a pension taxable? if yes, then is it after a certain amount or from the word go?
- will our pension be fixed?
- is there a difference in interest paid if lets say you put in money from your salary or not?
- how does the government pension scheme work? like when you get to retirement age are you given a pension by the state? how do you qualify for this? how much is it?
- how much is a average amount to contribute to your pension each month / year?
- how do you know how much money you will need when you retire? is there an amount one should aim to save to have a comfortable retirement?

your help and advice would be appreciated

thanks you so much

Lokolo

1) There is no such thing as a best type

2) Firstly - your employer, they may have a scheme, which they will also contribute to.

3) Yes, same as any other income, your personal allowance determines when you pay tax.

4) Pension will be fixed upon retirement, where you can choose a number of different options

5) No, you will get tax relief whether it comes out of salary or not, and pensions don't pay interest anyway.

6) Approx £5k a year, when you have 30 years of NI contributions. You will get it around 65-70 depending on your current age

7) How long is a piece of string?

8) See question 7

http://www.h-l.co.uk/pensions/interactive-calculators/pension-calculator

Theres a calculator there you can play around with.

jem16

xirokx wrote: »

Hi,

we are a couple aged 30 we would like to get a pension each not a joint pension

Just as well - you can't have a joint pension.

I would seriously recommend seeing an IFA.

McKneff

First and foremost, see if your company runs a pension scheme, and also if they contribute to it.

Get into it as fast as you can, its free money each month for as long as you work there.

xirokx

Both our employeers dont contribute a penny towards pension scheme.

I went to santander today and the bloke offered me a scheme, whereby you put £80 a month and the goverment puts £20. Via direct debit.
He gave me this example as I was thinking to save £100 pcm into my pension.
He then said the whole amount earn interest in between 4-7%. I can allways change the amount I want to pay in, then of course goverment's contribution dropps too, lets say for £50 of my money, goverment pays £12.50pcm
You cant touch this money until you reach 55 age. At age 55 I should have 35K out of which I would contribute 24K and the rest will be fromgoverment. this is based on £100pcm.

Is that good deal? what other bank offer??

Lokolo

OK so £80 + £20 isn't a Santander thing, its a pension thing. All pensions act like this.

Same with the 55 age thing, its a pension thing, not a Santander thing.

Personally going to Santander to operate a pension isn't a particularly a good move. You should either go and see an IFA (which I recommend), or set up your own Stakeholder pension, but this would mean you would need to choose the investments yourself.

jem16

xirokx wrote: »

Both our employeers dont contribute a penny towards pension scheme.

That's a pity.

I went to santander today and the bloke offered me a scheme, whereby you put £80 a month and the goverment puts £20. Via direct debit.

That's normal for any pension scheme.

He gave me this example as I was thinking to save £100 pcm into my pension. He then said the whole amount earn interest in between 4-7%.

Pensions don't pay interest so hopefully that wasn't what you were told. Investments within a pension can go up and down in value. Over the long term they would be expected to go up but it's not guaranteed. The 4-7% is a projection on growth.

I can allways change the amount I want to pay in, then of course goverment's contribution dropps too, lets say for £50 of my money, goverment pays £12.50pcm

Again normal for all pensions.

You cant touch this money until you reach 55 age. At age 55 I should have 35K out of which I would contribute 24K and the rest will be fromgoverment. this is based on £100pcm.

Again normal.

Is that good deal? what other bank offer??

A bank is never a good place to go for any investments. They are usually dearer and use poorly performing funds.

xirokx

God dear me! i though I was getting a deal haha..
There are so many pensions companies etc....isnt there 1 good one people go with??
How do i find who to go to?
Do IFA charge money for their time?

jem16

xirokx wrote: »

There are so many pensions companies etc....isnt there 1 good one people go with??

No - it is down to many things such as level of contribution, risk profile, what kind of funds are available, what age you are etc. There is no "one size fits all"

How do i find who to go to?

Find an IFA at https://www.unbiased.co.uk

Do IFA charge money for their time?

Do you work for nothing?

An IFA will accept a fee or work on a commission basis ( at least at the moment).

xirokx

Thank you I will look into this.
Would you know approx cost of their fees?

Lokolo

Someone I know from this forum got his pension setup for £300 + 1% commission, but that was a one off pension setup and recommendation.

It would cost more for an ongoing service.