Pension charges

Sand Wedge

I am looking at setting up a PRSA pension. All the ones that i have seen only invest €95 out of €100 that you contribute. i.e there is a 5% commission charge on contributions. Is this the norm?

Ste.phen

Lumber Joe wrote: »

Now you may have another question: but I was planning to put away tiny amounts every month and I can not afford buying land or a building. The answer is mortgage: get a mortgage and you can even cover month repayments by the rent.

I don't think anyone in good conscience would recommend Buy To Let property investment as a method of saving towards retirement, the amount of leveraging, personal risk, and the sheer amounts of debt involved are staggering!

Sand Wedge

Sand Wedge wrote: »

I am looking at setting up a PRSA pension. All the ones that i have seen only invest €95 out of €100 that you contribute. i.e there is a 5% commission charge on contributions. Is this the norm?

If you do not need advice on the products or funds available, it is possible to set up a PRSA without the 5% charge on each contribution.

You can purchase this type of product on an 'Execution Only' basis from a Discount Broker.

gerrybaah

The 5% charge was introduced as a standard charge by all providers. Bear in mind the Annual Mangement Charge is 1%. You can also get a Non Standard PRSA that gives you more fund choice and the charges are more flexible too. Like anything else though you get what you pay for. An online broker will get it sorted for you easily but don't expect ongoing advice and service. The main decision is what fund you want to invest in. Get your adviser to demostrate his/her reserach of the companies he/she has looked at for you and see how many funds each have available and which one most suits you. Once thats done negotiate with the broker on fees. Remember.....fees are not the biggest consideration but you can certainly do better than 5%!!

LionelNashe

Sand Wedge wrote: »

I am looking at setting up a PRSA pension. All the ones that i have seen only invest €95 out of €100 that you contribute. i.e there is a 5% commission charge on contributions. Is this the norm?

http://www.prsa.ie/ advertises advice-free PRSAs that don't take the 5% allocation percentage off each contribution.

Bear in mind though that the 1% that is taken each year as a management charge ends up costing much more than the 5%. If you invest €100, then 5% is taken once at the start and your €95 then grows for the duration of the pension. The annual 1% charge, though, is taken off the entire fund value every year, over and over again. Over 30 years, that's about 30% less growth (I think). It costs 6 times as much as the 5% deduction. I am looking to start a pension, but I'll definitely be looking for the one with the lowest annual management charge.

aimar

LionelNashe wrote: »

http://www.prsa.ie/ advertises advice-free PRSAs that don't take the 5% allocation percentage off each contribution.

Bear in mind though that the 1% that is taken each year as a management charge ends up costing much more than the 5%. If you invest €100, then 5% is taken once at the start and your €95 then grows for the duration of the pension. The annual 1% charge, though, is taken off the entire fund value every year, over and over again. Over 30 years, that's about 30% less growth (I think). It costs 6 times as much as the 5% deduction. I am looking to start a pension, but I'll definitely be looking for the one with the lowest annual management charge.

I have just started a pension that has an annual management charge of 0.5%. The monthly charge is 7 euro but as its not a percentage charge it doesn't matter whether you put in 100 or 1000 euros,its still 7 euro a month.

Ste.phen

Who's that with?

aimar

Ste.phen wrote: »

Who's that with?

ste.phen
I've only just registered with boards.ie and was under the impression im not allowed promote companies etc. I have the rep's name and number if you want you can PM me and ill give you his details.

Lawdie

LionelNashe wrote: »

http://www.prsa.ie/ advertises advice-free PRSAs

I think you meant to say "advice LESS PRSAs".

sharon b

Hi,

I a very new to this PRSA thing.

I am hoping to retire in 5-7yrs, and have a DB from my last job.

I have been quoted the below

For a Monthly amount of €800 gross the allocation rate is 4.25% and the FMC is 1% this for a contribution of between €9001 and €11,999

 If you contribute €12,000 (€1,000 per month) per year the rate is 3.5% allocation rate dropping to 3% after 5 years and the FMC is 1%

Should I go with this (the 12k seems a better deal) or try to negotiate??

Thanks

sharon b

I should say the above is IL which can be deducted at source. For anything else I'd have to deal with it myself which I really could do without

The J Stands for Jay

I'm guessing that's through Cornmarket, so you can always do better