23yr old pension advice

A

Anto318

Registered User
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Hi,

I am pretty new to all this pension stuff so some advice would be very beneficial. I am paying 5% of my monthly wage into pension and currently changing my investment options.

The company I work for are offering new pension schemes

1) Secured Performance Fund (Low Risk)
2) Eagle Star Balanced Fund
3) Consensus Managed Fund (Medium Risk)
4) Indexed Global Equity Fund (High Risk)
5) Eagle Star Dynamic Fund
6) Indexed Long Bond Fund (Annuity Protection Option)
7) Cash Fund

I am not planning on getting a mortgage in a house for another two years or so because there is a lot of travel involved in my job.

As I am only 23 I was thinking of splitting my investments:
80% Indexed Global Equity Fund
20% Secured Performance Fund.

Would this be a good option, I don't really know much about this area so any suggestion/advice would be greatly appreciated.

Thanks in advance
AM
 
you are so young to have a pension but i guess if the company contributes you are very lucky and should avail of it.
Ay 23 i would place into the highest risk 80/20 as even if falls it can climb again by the time you are going to need it.
 
Exactly thats what I was thinking 80% into high risk and just leave the 20% ticking over. Well the company will contribute the same amount as I am investing every month so it works out well.

Thank you for your advice, I wanted to get my pension sortedthen at least I won't really notice the money coming out of my wages and hopefully in 40+ years time I will have a substantial pension to live off and not have too many worries.

thanks again
 
At 23 there is little point putting 20% into secured performance. 20% ticking away is wasting away at such an early stage. You would be better to put all into a med risk.
If you really want to do a split then I would be more inclined to split between med risk and higher risk. But I would tend to put a max of 20% in the high risk. Its high risk so why put so much in just because you are 23 ?
Remember also that there are different charges for each type of fund. The more actively managed charge more but there is little or no evidence that these do any better than consensus type funds.
To get a reasonable pension, a minimum of 15% of salary should be saved in total. 5% will not get a lot.
Most important point though is that you get on the ladder and never leave it.
 
Well 5% is the maximum of my wages that I can put into my pension and the company that I work for match what I am putting in. I've gone for the 80% High risk as it has acheived well over the last decade or so. There is a pension review in 6 months to see how the relevant schemes are acheiving so then I will re-consider my options, for the for 6months I just want to get an idea of the advantages/disadvantages of a high risk option and see what the advantages/disadvantages of a low risk option are.

As I am only 23 I just want to get a feel for the whole pension thing and hopefully choosing a high risk and low risk split will give me some feedback.

Thanks for your advice though aidan
 
Well 5% is the maximum of my wages that I can put into my pension and the company that I work for match what I am putting in
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I would be very surprised if you can't make additional voluntary contributions AVC's. You should at some stage in the near future consider making additional contributions up to the max allowed by revenue.
 
Oh I can I can add an addition 20% AVC to my pension but I am only 23 so i'll start contributing to AVC maybe at 30 just want to get on the ladder and hopefully in two years or so invest in the property market also so my wages and my partners wages can be spread over a number of investments.
 
Up to age 30 you can contribute 15% of gross salary. You scheme must allow this.
From 30-40 you can contribute 20%.
This includes any employer contribution.

Also check if it is 5% of gross salary you and employer are paying or 5% of gross salary less state pension (or even 1.5 times state pension). Some DC schemes do this as it was the norm with DB schemes. If so, the employer is only paying about 4% into your scheme (and so are you !).

Once you start paying, my advice is to close your eyes for 10 yrs, only then consider switching funds.
 
I was thinking of giving it 6months or a year then sort out my options for the next 10+ years so I won't have to change again.

Thanks for all ye're advice it has helped alot
 
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