Pensions question

[Kye1]

Hello.

What seperates a pension and a personal savings account? Im currently saving in the aib 7 day deposit and have saved 1k euro. Im 21 and living in Ireland for almost a year now. Me and my girlfriend are trying to get a morgtage at the moment. We will be paying less then we do now for rent. We both have a good oppertunity to save money (which we do) but not sure if we can commit to a fixed term saving account of any kind.

I was wondering what advantages a pension scheme would be over a long term fixed savings account? We have money to save, but its deciding if we should save for the medium term or if we should lock up much of our income for the very long term. Would i not be able to unlock the pension after 30 years?

Kye.

 

[ClubMan]

Pensions question

Please edit your thread title.

 

[ClubMan]

What seperates a pension and a personal savings account?

You get tax/PRSI relief on the former but not on the latter. You cannot access the former until retirement (with limited exceptions) but you can access the latter.

I was wondering what advantages a pension scheme would be over a long term fixed savings account?

Tax/PRSI relief would be the main one.

We have money to save, but its deciding if we should save for the medium term or if we should lock up much of our income for the very long term. Would i not be able to unlock the pension after 30 years?

If you are saving towards a mortgage/house then some people would recommend that you forget about the pension for now unless doing so would cause you to miss out on employer contributions etc.

 

[Kye1]

Re: Pensions or savings question

Thanks Clubman, you answered everything i wanted to know.

Kye.

 

[ClubMan]

Im currently saving in the aib 7 day deposit and have saved 1k euro.

Is that the AIB c. 5% account? If so then you should probably consider sticking regular savings towards the house into a c. 7% regular saver account instead. See the Financial Best Buys forum for more details of such regular saver accounts.

 

[Kye1]

I bank with AIB and my girlfriend banks with BoI. Both have a good regular saver at 7%, so i think we will both be saving into our own banks. thanks for the advice.

Kye.

 

[ClubMan]

There is no such thing as "your own bank". You can usually easily open an account with any institution that offers something attractive to you. Don't restrict yourself to the bank with whom you have your current account or whatever. Think more generally!