So I'm thinking of starting with a Stakeholder Pension but....

JuniorSherlock

It's an externally managed fund which he actually recommended over the internal fund - the reason being that with the external fund they are constantly keeping an eye on the funds whereas they don't have the time to be quite on the ball internally.

dunstonh

JuniorSherlock wrote: »

It's an externally managed fund which he actually recommended over the internal fund - the reason being that with the external fund they are constantly keeping an eye on the funds whereas they don't have the time to be quite on the ball internally.

That would explain the cost difference. Aviva stakeholder doesnt have any external funds like that. The SW internal funds comparable to the Aviva ones would be cheaper.

There is no rule on this and there will be exceptions but a general trend is that Insurers historically have tended to be quite good on fixed interest securities and property but really poor on equities. So, using an external fund when you are mostly investing in equities is a sensible thing to do. Many internal funds are passive managed rather than active managed. So, in effect, they are closet trackers. Passive managed are best avoided.

JuniorSherlock

Well I hope it performs well!

I'm sticking just over £2k in it and then £80per month until the mortgage is paid off (our mortgage is now just £43k and we are overpaying by £140 a month to get it paid off quicker), once we are no longer making mortgage payments I can raise the monthly payments to £200 and my husband will do the same with his pension.

I am aiming for £5k a year from my personal pension on top of the state pension which will give me a comfortable existence in my old age. Anything else will be a bonus.

vectistim

JuniorSherlock wrote: »

Well I hope it performs well!

I'm sticking just over £2k in it and then £80per month until the mortgage is paid off (our mortgage is now just £43k and we are overpaying by £140 a month to get it paid off quicker), once we are no longer making mortgage payments I can raise the monthly payments to £200 and my husband will do the same with his pension.

I am aiming for £5k a year from my personal pension on top of the state pension which will give me a comfortable existence in my old age. Anything else will be a bonus.

Have you looked at projections of what you might get? You're going to pay in £1,000 per year for the next ten(or so?) years, and then about £2,500 a year for the next fifteen years. And then hope to get an income of £5,000 a year for the next twenty five years.

JuniorSherlock

No vec I haven't because I don't want to depress myself

It may be an unrealistic aim but we all need to aim for something right? And if we are particularly flush some months then I can always deposit some lump sums.

I also have a Cash ISA that I keep topped up. Right now it's worth £10k. So my aim is not an impossibility.

gadgetmind

Assuming 5% pa growth of funds and 2.5% pa uplifting of contributions (which makes that £2.5k in 10 years into around £3k) then I get a final pot of around £115k.

However, the purchasing power of that will have about halved, so you're going to be after over £9k pa, which would need an annuity paying 8% pa.

Of course, 25 years is a long time and 5% absolute (not real) growth is more than a little skinny, so it's not impossible.