starting a pension

kayleigh_b

Hi, i am 26 years old and looking into starting up an account for a pension, looking into putting weekly payments in myself... Has anyone got any advice with who to do this with and what the best thing to do is.
Any info much appreciated.

atush

How much per month?

Does your employer offer a pension? usually the best place to start, as they add extra money on for you (we call this free money).

Personal pensions can be opened online in places like cavendish online and HL

kayleigh_b

Around £50 a month, its only a very small business and the workplace pensions isn't in form until 2018 i don't think, I was thinking the earlier i start the better, was just wondering where to start. I will take a look online, thanks for your advice.

atush

Yes, the earlier the better.

50 a month is low, so look at charges. And invest in somehting cheap and global like a global tracker fund, or Vanguard lifestrategy (a couple of threads here about this, do a search).

Once you have a pot of 20K or so, you can get some paid advice?

dunstonh

Has anyone got any advice with who to do this with

That is a regulated activity and the board is not authorised to do that. it is discussion on here.

Around £50 a month

That eliminates a lot of options as it will be below their minimum contriubtion level. That should also tell you that it is an unrealistic contribution and that you should be looking to pay something more sensible.

At 26, you are starting later than ideal. So, its unlikely that £50pm is enough.

xylophone

You might consider a basic stakeholder - £50 a month would be okay for this.

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

HardCoreProgrammer

To the OP, are you on basic income tax? If yes and there is no employer contribution, then there is no material benefit over investing in a stocks and shares ISA. In this case, I would consider saving the money in an ISA, and wait until the workplace pension is in place and your employer is contributing.

Maelwys

kayleigh_b wrote: »

Hi, i am 26 years old and looking into starting up an account for a pension, looking into putting weekly payments in myself... Has anyone got any advice with who to do this with and what the best thing to do is.
Any info much appreciated.

Cavendish and BestInvest are a few good options for smaller SIPPs at an 0.3% percentage-based annual charge - and I know BestInvest's lower-limit for automatic contributions is £80 a month (which will be topped up by the taxman to £100 if you're on basic-rate tax).

You should be able to put in one-off contributions as well, so you could transfer in £100 every other month instead of £50 a month.

A Balanced Global Portfolio is the name of the game. The Vanguard LifeStrategy Fund is a particular favourite around these parts, and given your age you could plump for an equity-heavy flavour like the 80% or even 100% options.

As the above poster points out though, if you're on Basic tax and your employer isn't making pension contributions for you then there's really not much benefit for your for going for a SIPP over a Stocks and Shares ISA. You'd just be locking your money away somewhere you can't get at it until you hit 55...

dunstonh

then there is no material benefit over investing in a stocks and shares ISA.

yes there is. You forget the 25% tax free cash at the end which means only 75% of the pot is taxable (and only the amount above the personal allowance).

I would consider saving the money in an ISA, and wait until the workplace pension is in place and your employer is contributing.

I agree that it is a viable option to consider given the short timescale until one becomes available.

I would still be concerned with the amount even though stakeholders can do it. Paying in peanuts means you get peanuts.

neilvw

Maelwys wrote: »

You'd just be locking your money away somewhere you can't get at it until you hit 55...

In the OP's case, till she is at least 57, probably 58 or later on Government plans.

kidmugsy

HardCoreProgrammer wrote: »

To the OP, are you on basic income tax? If yes and there is no employer contribution ...

then I suggest you wait to see what pension reforms come along next. There must be a non-negligible chance that tax relief will rise for basic rate taxpayers and fall for higher rate. So if you are a basic rate payer, at least wait for the Chancellor's Autumn Statement and even his Budget in March. Meantime bung your £50 p.m. into (say) an S&S ISA, making the same sort of investments that you would have done in a pension. Or even just save it in an interest-bearing current account until you see how things pan out.