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Too young to start a pension?

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  • 28-10-2012 12:07am
    #1
    Firstmortgage
    Registered Users Posts: 5 ✭


    Hi everyone.

    I'm 22 in the process of going for a mortgage over the next 6 months.

    I need advice on a pension, is it too early to start one? And if not what type should I be after.


Comments

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    #2
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,711 Mod ✭✭✭✭Henry Ford III


    It's never too early.

    Get proper advice, and pay particular attention to minimisation of charges, and investment funds appropriate to your circumstances.


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    #3
    Tipperary animal lover
    Registered Users Posts: 1,498 ✭✭✭Tipperary animal lover


    Start straight away .... Never to early, as above get proper advise.


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    #4
    kennyb3
    Registered Users Posts: 6,724 ✭✭✭kennyb3


    I would spend the next 6 months re-searching it if I was you that's far more important. (possibly the 2nd biggest financial decision after buying a house)

    Learn about execution only services, the various providers and their products, charges and how they work.

    With the levy and the lowest charges (usually 1% although some products are only 0.75%). you need to be returning at least 1.6% to be breaking even (and that's before inflation).

    You also need to consider the fact that

    a) you're locking your money away until your 60

    b) the possibility of tax relief being reduced on contributions

    c) The possibility of the 25% TFLS on retirement being withdrawn long before you retire.

    Do up some spreadsheets and compare products.


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    #5
    uberalles
    Registered Users Posts: 836 ✭✭✭uberalles


    Beware that some fees can account for 30% of your contributions according to recent reports on the news.

    What a rip of some products are.


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    #6
    kennyb3
    Registered Users Posts: 6,724 ✭✭✭kennyb3


    uberalles wrote: »
    Beware that some fees can account for 30% of your contributions according to recent reports on the news.

    What a rip of some products are.

    It works out about 17.6% if you go execution only and assuming a 1% charge and a 3% growth rate (reasonable unlike the pension companies 6% rate).

    As i said I think it's important to educate yourself properly.

    Edit:

    Just to add if the levy stays at 0.6% for the duration, and you didnt go execution only and thus had a 5% charge on contributions and the same assumptions as above this could account for about 33% of your contributions.


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