Help with Stakeholder pension

Neverland

BLB53 wrote: »

There was a good article on www.monevator.com a couple of days back on stakeholder pensions (scroll down page) which should give a few pointers.

You are a bit limited in choice of funds with a stakeholder so maybe consider openning a sipp with e.g. sippdeal or hargreaves lansdown.

The main advice is to make sure you don't pay too much in charges, therefore passive trackers at less than 0.5% TER will probably be better.

Do not fall into the trap of thinking you have to take more risks to 'catch up'. OK you've missed a few years but 25 years is still plenty of time to build a decent pension 'pot'.

Good luck with everything

BLB

There are a lot of providers of both SIPPS and funds

Fees vary hugely and generally the more heavily marketed a company or fund is the worse value it is because the high charges pay for marketing and adviser commissions

There are some threads on this forum about the cheapest SIPPS but what is cheap varies on the size of fund you have

If you go down the index tracker route you can limit the fund management charges you pay to not much more than 0.25% of funds under management a year

Minimising your costs will make a huge difference to the size of your pension fund when you retire in 20-30 years

You get 5-7% investment returns each year depending on if you are lucky enough

However you could be paying between 0.25-3.00% a year in fund management charges depending which investment vehicles you use

If you choose an expensive fund administrator and an expensive investment manager more than a third of your pension fund could disappear in charges

cowboymum

Thanks all for your very helpful replies. What I understand is that I just need to start paying into a pension at lowest costs. I am going to go through cavendish and definately commit to paying a small amount monthly, then one off payments if it is a particularly good month. I think I will leave sipps for the moment but will not rule them out completely.

Phew! It will be good to get this sorted!