21 yr old - stakeholder pension?

essjaytee

Hope someone can help!


My son is a 21 year old apprentice currently earning approx. £9,000 pa. He works for a one man band so no company pension scheme.


He really wants to start paying into a pension though, so is a stakeholder the best way for him to go? If so, is there somewhere we can find out the fees different suppliers charge in one place without having to wade through dozens of different websites? Or is it a case of knuckling down and going through them one by one??


Any help appreciated...

kidmugsy

essjaytee wrote: »

Hope someone can help!


My son is a 21 year old apprentice currently earning approx. £9,000 pa. He works for a one man band so no company pension scheme.


He really wants to start paying into a pension though.

It's admirable that he wants to save for his old age, but I can't see that a pension is the way for him to do it yet. He won't gain from an employer contribution, he won't gain by salary sacrifice, he'll be tying the money up for forty or more years, and he'll get just 20% tax relief. I suggest he save in an ISA, or even a high interest current account, until the situation changes. When it does (it always does) you could come back and ask again.

xylophone

Getting into the habit of making a regular (even if small) contribution is no bad thing.

http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/

A young person of my acquaintance had a pension started for him when young which later he transferred into a SIPP and runs alongside his occupational pension.

At some point over the next couple of years, all companies will need to provide a pension scheme for their employees.

https://www.gov.uk/workplace-pensions

dunstonh

It is good to see a parent get involved with the financial planning of their children. I remember when parents used to call us just after an 18th birthday to get these things done. Too many leave it until their 30s now.

However, I largely concur with those above. Only because the employer is going to have to offer a pension scheme in a couple of years. So, getting him used to saving each month with an ISA to build an emergency fund without dipping in to it could teach him restraint (from accessing money). Then when the employer offers the scheme, he joins that.