Baffled by pension literature

mrsspendalot

My husband started a new job in May this year and is now eligible to join their pension fund. He has brought home some paperwork and I don't understand a word of it. In his last job his pension was straight forward - pay in x% and employer paid in x% and that was that. This is all really complicated and we could do with some advice!

The pension fund is through AXA and the application form says "group personal pension, AXA sunlife (No.1) scheme". The booklet enclosed is talking about secure, protected, moderately speculative etc. risk categories, with profits, lifestyle retirement funds, select funds, etc. It is all so confusing. I can't find anything anywhere which spells out in plain English how much he pays, how much work pays and what the benefits will be.

If anyone has any experience of this company's pension can you help? thanks xx

mrsspendalot

OK, just looked back through his paperwork and the company do not pay into the pension fund. It says it is a stakeholder pension. I am still no wiser as to what that means though, although i'm pretty miffed that the company don't contribute.

He is 24 so has years until retirement, so what are our best options?

dunstonh

If the company dont make contributions then dont bother with it.

AXA stakeholders are not as good (or as cheap) as their personal pension. In 2012, the company will be forced to contribute to it or join the NPSS so you need to find something to do with the money for the next 5 years.

mrsspendalot

Thanks - so we should find a better personal pensions provider for now then? If the company then have to make contributions from 2012, could we transfer the pension over? Sorry if I sound really dumb, most things i can cope with, but pensions just aren't that easy!

dunstonh

If the company then have to make contributions from 2012, could we transfer the pension over?

If the company decide to contribute to their existing scheme, then yes. If they decide to go with the NPSS then no.

Dont worry about that though because when you get to retirement you will be able to almalgamate all the pots into one when you do the open market option.

Thanks - so we should find a better personal pensions provider for now then?

Depends. I wouldnt personally pay into a stakeholder but there is nothing wrong with them if you dont want the best option but want a simple option. A stocks and shares ISA may be more suitable for the next 5 years whilst you wait for the NPSS to come in. That way you get choice on what you do at that point.

mrsspendalot

Thanks - I did think of paying into an ISA. You have been very helpful xx