Pension for an apprentice?

kisk

My son started an apprenticeship last August and I am trying to persuade him it’s a good idea to start saving for retirement. Doesn’t go down well with a 16 year old teenager but the sooner you start the better.

I am just wondering what the best option is considering his employer provides no scheme as he is a one man business. My son once finished his apprenticeship intends moving onto further training for the oil industry so he look to transfer what has saved in the future. Probably saving on £10 to £20 a month to start with but would increase this as wages increase.

Any ideas on what the best option is?

Thanks Kisk

dunstonh

If it is pension then there is only one option and thats a stakeholder pension. That level of contribution isnt suited to personal pensions or SIPPs.

Its great that you want him to start young but it may be worth getting him used to savings accounts and a regular standing order into one of those first. If he can see some benefit in short term saving (perhaps saving initially for a year or two) then it will help him later when it comes saving for a longer term.

Primrose

I can see the sense in dunston's suggestion. As your son is 16, I believe he's now eligible to contribute to a Cash ISA and he is probably already paying a small amount of tax, interest on his ISA would be tax free. At some future point he could always transfer that money into a stakeholder pension. Of course if he pays into a stakeholder pension now, his contributions will get tax relief so the value will grow more quickly.

robp

When I started my apprenticeship back in the late 80's, I and many of my friends started getting cold calls from CIS FA's.

I was persuaded to start a small savings pot with them (they were very persistent!) but I soon stopped paying into it as the cost of running a moped and feeding my teenage body with beer needed all of my £40 per week pay.
:rolleyes:

Now approaching 40 and having read this site, I've realised the need to start saving as early as possible.

A better approach may be to demonstrate to him the value of investing, perhaps start an ISA together so he see's you think it's worth it too?

I wish I'd started saving/investing once I started full-time employment. As an apprentice I was too young/naive/stupid to understand the value in later years!

Cheers,

Rob

kisk

Thanks everyone I think the cash ISA is maybe the way forward so I will look into that for my son. I took out a insurance with CIS when I was 18 which was for 30 years paying in only £6 a month. It matures this year and a couple of months ago it was valued at £10,000 so hears hoping there are some good bonuses at the end. This is maybe why Im keen for my son to start saving early.

Thanks again kisk