Confused about pensions

[DublinSteve]

Hello,

[EDIT: Thanks for your help]

Steve

 

[RainyDay]

Hi Steve - Have a good read of the Pensions chapter of the Guide as a starting point. The only real 'catch' of pensions is that the money is pretty much locked away until you retire, so I wouldn't put money into a pension if I was going to need it for a house deposit or wedding etc.

To answer your not-so-stupid questions;

. Is it true that money I pay into a pension is NOT taxed? (i.e. I pay into my pension first, and then the rest of my salary is taxed as normal?)

In general, yes - there are certain limits on this (starting at 15% of your salary at your age). The only 'catch' here is that you will pay tax when you draw down this money in retirement (if you fortunate enough to have a big enough pension at that stage).

2. If I use my employers pension scheme, if I move jobs do I lose all the money I/they have paid into it?

In general, No. You never lose your own contributions when you change employer. You will have a few options, such as leaving your contributions growing in the original fund until you retire, or transferring your contributions into an insurance company retirement bond, which will be invested on your behalf until you retire. If you are a member of the pension scheme for less than the 'vesting period' of the scheme (which by law can be no longer than 2 years), you could lose the employer contributions if you leave.

.3. When can I access my pension? At a certain age? Do I get one lump sum? (as in, is a pension they same as opening a savings account?)

Check the rules of your particular scheme, but it is normally 65.

4. What if I want to move my pension? What freedom do I have?

Depends on the rules of the scheme, but generally you don't have a whole lot of freedom here.