Personal pension versus PRSA

M

Mrs May B

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I don't have much knowledge in this area but perhaps someone can help.

Mr. May B took out a personal pension circa. 7 years ago, it is with Eagle Star. He receives a tax credit for his contributions. He has never had an employer who contributed to his pension but now his current employer is offering a PRSA. Husband would contribute 15% of salary, and company would contribute 12.5% of the 15%.

Based on this (albeit very vague) information can anyone give some advice as to whether to stop contributing to personal pension and take up PRSA or stick with the personal option?

We are at a loss to know what to do. Advice received to date from PRSA and personal pension parties are a bit one sided !!

All advice gratefully accepted - thanks.
 
X

What are the charges on the PRSA and personal plan? Standard PRSA charges are capped at 5% of each contribution and 1% annual management fee but lower charges can be obtained through negotiation and/or payment of a flat fee for arrangement up front. If the charges on the PRSA are around the same OR LOWER as those applying to the the personal plan then, given that the employer will be topping up the contribution, it would seem to make sense to stop contributions to the personal plan for now and go with the PRSA assuming that it offers investment funds suitable to your needs/age etc. There is no reason that you can't have several pension plans over the years which are stopped and started as required (assmuming no penalties for making plans paid up). There is no reason of necessity to merge different plans either unless doing so is (a) possible and (b) allows you to benefit from lower charges and/or more flexibility (e.g. more suitable range of funds to choose from, less administrative hassle etc.).

So, basically - compare the charges on the two plans and use that as one key determining factor in making a decision.
 
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