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Pension or house deposit?

  • 07-12-2019 3:30pm
    #1
    BilboBagOfCans
    Registered Users Posts: 70 ✭✭


    Deleted


Comments

  • #2
    Geuze
    Registered Users, Registered Users 2 Posts: 13,590 ✭✭✭✭Geuze


    A few points

    Personally, I would prioritise saving for a house

    27 isn't late to start, if you work to 67 you will have full service

    2.75% is robbery, you can get a PRSA-AVC with 100% allocation / no contribution fee / 1% AMC


  • #3
    BilboBagOfCans
    Registered Users Posts: 70 ✭✭BilboBagOfCans


    Can you recommend where to go to eat that prsa?


  • #4
    Geuze
    Registered Users, Registered Users 2 Posts: 13,590 ✭✭✭✭Geuze


    BilboBagOfCans wrote: »
    Can you recommend where to go to eat that prsa?

    www.labrokers.ie, but the catch is it's execution-only, no advice.


  • #5
    Liam D Ferguson
    Registered Users, Registered Users 2 Posts: 542 ✭✭✭Liam D Ferguson


    Geuze wrote: »
    www.labrokers.ie, but the catch is it's execution-only, no advice.

    I agree that it makes sense to prioritise saving for a deposit for a home.

    I agree that an annual charge of 2.75% on the AVC, even for 10 years, is steep.

    I think that www.labrokers.ie is an excellent place to go to buy execution-only financial products.

    BUT

    As has been said here, an execution-only service provides no advice and is intended only for people who know exactly what they are doing. So, for example, you need to know the difference between the fund choices on offer and which one is the most suitable for you.

    An AVC is not suitable for everyone. In some circumstances, people would be better off buying back years instead. With full service, that would not be the case here. As another example, if it is likely that all of the resulting pension at retirement is likely to be taxed at the high rate, then it's arguable that a person should not be making AVCs at all.

    As I say, I'm quite the fan of execution-only discount brokers and LABrokers in particular who have been offering excellent deals for over 20 years. But anyone considering putting money into an AVC really does need to be sure that an AVC suits their particular circumstances. €210 per month, indexed at 3% per year for 40 years would involve a total investment of over €190,000. Do the homework carefully because an execution-only broker won't give advice.


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