Any advice on setting up a new pension?

fullahmoolah

Hi I'm a complete newbie to pensions and was wondering if there are things to look out for before I sign up for one.

I've been looking on comparison websites and have seen that the annual fee varies from 0% to about 1.5% and obviously I would go for a 0% one, but why isn't everybody doing this? If some of them can charge 1.5%, how can other ones charge nothing?

Also, can anybody tell me what happens if you eg lose your job and can no longer afford to pay in what you used to? I was looking at a Standard Life one into which you pay a minimum of £1,000 annually but if I was to lose my job I couldn't afford this any more, so what happens then?

Thanks in advance.

dunstonh

I've been looking on comparison websites and have seen that the annual fee varies from 0% to about 1.5% and obviously I would go for a 0% one, but why isn't everybody doing this?

1 - comparison sites are rarely the best place to buy a pension
2 - no pension has a 0% charge - that is bad data or bad interpretation
3 - charges are not the key issue when buying a pension

Some pension contracts put the charges at contract level and sell units to pay the charge. Some pensions put the charges at fund level and pay the charges within the fund. Some pensions have a cash fund and place most of the charges through the cash fund. I suspect the 0% ones you are seeing are either an error on the comparison site or one that charges on the fund and not the contract.

I was looking at a Standard Life one into which you pay a minimum of £1,000 annually but if I was to lose my job I couldn't afford this any more, so what happens then?

Interesting choice. Not one you normally associate with small contribution levels. Why Std Life?

If you stop paying into the pension then you stop buying new investments. However, the investments you already hold remain in place.

fullahmoolah

Hi I just picked Standard Life at random for illustrative purposes, that was the only reason. Thanks very much for your advice!!