stakeholder pensions

BWZN93

Hi

I dont really know much about pensions, and I have been offered a job (which I accepted and I start in two weeks) and they tell me I will be able to join their stakeholder pension after 12 months of continuos service. I understand basically what this kind of pension is.

However, im 25 now, and clearly need to start seriously thinking about pensions. I was wondering If someone can give me some advice regarding whether to go and get my own pension (as i wont be able to join the one at work for 12 months) or wait and join the one ive been offered, and similarly, what to look for a being good in this kind of pension (i.e - charges, who is known as a good provider of this kind of pension etc)

Also, If i was to start my own, could I transfer it in to the one at work?
Will my employer contribute to this kind of pension (there is no mention of it in the offer letter, but they have the benefits handbook which I can have a copy of when I start - but is it typical of employers to contribute to this kind?)

Sorry if this message seems a little garbled, but I just want to make sure im sorted out!

Thanks

Jo xx

Debt_Free_Chick

jw1096 wrote:

Hi

I dont really know much about pensions, and I have been offered a job (which I accepted and I start in two weeks) and they tell me I will be able to join their stakeholder pension after 12 months of continuos service. I understand basically what this kind of pension is.

I assume that the employer means that you have to wait for 12 months before THEY will contribute to the Stakeholder. If so, ask them if you can take one out now and pay your own contributions to it.

If they allow this - and I can't understand why they wouldn't - then you can take a closer look at what's on offer and decide if it's for you.

HTH

dunstonh

I agree.

Just because the employer wont start contributions for 12 months, it doesnt mean that you cant get it set up now and get your own contributions paid in.

So much more convenient that way.

BWZN93

Thanks for the replies so far, you have been most helpful! I think Ill be getting that pension started then!

On a side note, does anyone else feel 'strange' about planning something that isnt going to happen for another 40years? I was thinking about it earlier, and then it occured to me that I was planning retirement, and I dont even have a hint of a wrinkle yet!

Anyhoo, back to work...

Jo xx

margaretclare

No, you shouldn't feel strange about it! It's one of those things that you set up and forget about, get on with the rest of your life. But having it there gives you security.

Don't forget that the longer it has to grow, the better the 'pot' will be at the end. And you have no idea what changes may come about in those 40 years.

Aunty Margaret

BWZN93

Thank you!

Ive just been talking to my current flatmates and they had a blank look on their face when I was talking about pensions. I just realised they are the strange ones! Thank God I have you guys to point me in the right direction!! I feel all organised now!

Jo xx

YorkshireBoy

jw1096 wrote:

On a side note, does anyone else feel 'strange' about planning something that isnt going to happen for another 40years?

Just to give you something to think about...

I've been in my (Scottish Life) company scheme since October 2003. I've paid in £3,650 net of tax relief, yet my fund value tonight was £9,450.

The reasons...

1/ Tax relief
2/ 4.5% employer contributions
3/ Contracted out payments
4/ Fund growth

I think with this kind of return, its worth "planning" (and getting all the "free" money you can).;)

BWZN93

Im sold!

Jo xx

margaretclare

Yes, you do get 'free' money which helps the fund to grow. We should have pointed that out to you before. In the best schemes, the employer puts in an equal contribution to yours. And also you get 22% from the taxman so for every £78 put in, the taxman tops it up to £100. And it grows over time - the longer the time, the better.

Best wishes

Aunty Margaret

dunstonh

since October 2003

Dont forget that stockmarket crash happened just before that so you have also benefited from the partial recovery. Having a stockmarket crash every now and then when you have a long time to go until retirement can actually be a good thing. You get to buy all those units much cheaper.

Not so good for those closer to retirement though who don't have time to recover. Which is why you should move out of the stockmarket as you get closer to retirement.

EdInvestor

Hi Yorkshire Boy


I've been in my (Scottish Life) company scheme since October 2003. I've paid in £3,650 net of tax relief, yet my fund value tonight was £9,450.

The reasons...

1/ Tax relief
2/ 4.5% employer contributions
3/ Contracted out payments
4/ Fund growth

How much was paid in from the employer and the NI rebates, on top of your 3,650?

It would be helpful to know, so Moneysavers can see the importance of the "free money".