Advice on starting my own pension

L

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Hi
I recently gave up work to look after children but I've been lucky to secure a 2 day wk job and my husband a promotion so I think I could afford to invest €200pm into a pension for myself. I was previously with the company pension which was suspended when I left.
Can anyone advise me what to do with my pension? I have a small lump sum from that employer which can be moved or left alone.
I'm 33 and plan to be off work full time for next 1-2 yrs depending on how things go (and whether I have any more children!)
What is the difference beween a PRSA and a Personl Pension? I received advice on pensions previously from my company so I know about risk etc and the way they work so I am tempted to go with the better deal execution only pensions as I don't think I need to have that advice again but then I'm not that well up on stock markets etc- I think a moderate risk medium to long term would suit me?
My husband has his own pension.
Any help appreciated
 
The main difference between a personal pension and a PRSA is charging structures.

PRSA's were meant to simplify the pensions industry but many times a personal pension can work out better for an individual because a 0.75% management charge on a personal pension often works out better even with other charges than the 1% management fee on a PRSA.

My advice is if you are shopping around is to get PRSA and personal pension quotes done on the same investment basis and examine the estimated maturity values of both to see what is best for you.
 
peter murray said:
At €200 per month you should stay a mile clear of ordinary personal pensions and PRSAs. Both are too risky and the charges are disproportionate. Even if we don't have another market melt-down or two before you reach retirement you are likely to have insufficient to fund any reasonable level of pension.
Because of the recent bad publicity surrounding these equity based products and the fact that people have paid good money in charges to incompetent fund-managers who only lose their money, some banks have brought out new products which allow you invest your fund in an interest-bearing cash account. Beware! They all allow the bank reduce the interest yield after an initial "come on" period, after which you may be forced back into high-risk, high-cost equity-based funds or accept a return which is negative, net of charges. The ingenuity of this industry to devise ways of getting the gullible to part with their money is awesome.
Click to expand...

Not every personal pension/prsa is invested in equities. There is nothing to stop someone putting money into a cash fund/gilts fund.

Charges are typically 5% bid/offer spread and 0.75/1% management charge. For arguments sake say charges at worst are 6%, tax relief is at minimum 20%. Show me another investment Peter that gives you +14% before any interest.

Just because managed funds and equities in particular have nosedived, This does not mean that Pension funds are crap ways to save for your retirement as you will be allowed to take a tax free lump at retirement as well as buy an annuity.
 
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