executive pension is it prudent

[SHEEPFARMER]

Hi folks
My brother has changed from sole trader to ltd. 28 years old wants to start a pension. Thinking about a Zurich executive pension. Is it worth his while or should he just bank money. how does an executive pension work for a director of ltd company... ( acorn rep called in but the charges that were never mention look crippling so acorn can stay on the tree... Needs advice but from what I can see all financial advisors just want a quick buck... at his expense.... help...

 

[Steven Barrett]

What do you want to know? All pensions work the same. The rules are a little different around the edges. For example, with an EPP (executive pension plan), he can put in a lot more as the revenue rules are the amount need to fund a pension of up to 2/3 salary. There's a formula used to calculate this amount. If he is setting up an EPP, he needs his latest P60 or last 3 payslips as proof of drawing an income. Otherwise, everything is the same, his money goes into the same funds and is invested the same.

And yes, he should contribute to a pension, just keep it ticking along, building up a fund over the years. The longer the money is invested, the more he benefits from compounding. There'll be ups and downs along the way but that's how markets work.

Get your brother to talk to someone who'll do it on a fee basis. The charges will be lower that way.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)