Personal pension

[Jaded]

Looking for pension suggestions for a young person (23) who has a one year set of contributions that he can't leave in the employer scheme, but wants to make sure that he gets the best long term benefit from the year's money. Eventually he might be lucky and go back to the same employer permanently but they won't let him leave the money in the there unless the employment was 2 years.

[zendog]

How much are we talking about? Unless it's a lot (unlikely) back in the bank account or spend it. 

[Ben T]

Sort of replying cos i'm interested in the thread, and I'm not sure this is the 'right' answer (and obviously this doesn't constitute financial advise) but the implementation I plumped for when I wanted to consolidate my pensions is to put them in a SIPP, and to simply choose the fund with the lowest annual charges. From my research that was the L&G international index tracker and UK index tracker, and I've got them administered by hargreaves lansdown (hl.co.uk).
Whether that's the best I don't know but am interested on hearing others suggestions anyway.

Also, a bloke I know told me that: Managed funds are designed to ensure a comfortable life in retirement.

(click to show/hide)

For the fund manager.

[Jaded]

OK! A bit more info I've just got, if he puts it into a personal pension he gets three times more money than if he takes the cash.

[Wowbagger]

After Mrs. Wow's short spell in the Civil Service, she took her pension out and bought me a piano.

[rogerzilla]

I think you have to be qualified to give specific advice but I would look for low management fees and a choice of funds with easy fund changes as required.  The Trustnet website shows the performance of most funds over the last 5 years and what quartile the particular fund is in for the sector; this takes out the market effect.

[Jaded]

I think you have to be qualified to give specific advice but I would look for low management fees and a choice of funds with easy fund changes as required.  The Trustnet website shows the performance of most funds over the last 5 years and what quartile the particular fund is in for the sector; this takes out the market effect.

Yes, I think so too, we will have a look at that site, thanks.

[Adam]

Looking for pension suggestions for a young person (23) who has a one year set of contributions that he can't leave in the employer scheme, but wants to make sure that he gets the best long term benefit from the year's money. Eventually he might be lucky and go back to the same employer permanently but they won't let him leave the money in the there unless the employment was 2 years.

I can't see why the employer is stating he has to be there for 2 years, for the money to remain in the company scheme.  There's no legislation requiring that. 

How large is the employer, and when did he join their scheme?

For actually investing the money, if it is transferred, then long term, provided he's happy with the risk, then a low cost, market tracking equity investment would make most sense.

[Jaded]

It's a civil service pension.

I was thinking along the lines of your suggestion, so I think that's the way  he should go.

[Adam]

It's a civil service pension.

Ah - different rules apply.  Yes, take the transfer value rather than the refund of personal contributions.

[phil d]

The trouble is that the charges that the SIPP operator levies are likely to swamp the funds available to invest.  One of the cheapest SIPP providers (for a simple SIPP) is Liberty.  Take a look at their website to see their charges, remembering that these are entirely separate from the investment management fees.  Another low-cost provider is Alliance Trust Savings, and while they are themselves investment managers (the investment trust Alliance Trust, and probably others) you are not restricted to investing in their funds.

Nothing in this post is to be construed as investment advice.  The I (and my wife) have SIPPs with Liberty, and also manage a SIPP on behalf of our grandson through Alliance Trust Savings.  Until retirement I was an adviser to private investors, but relinquished my registration on retirement.

[Jaded]

Nothing in this post is to be construed as investment advice.

Yes, I really understand this bit!

We shall see what we can do and then I will delete this thread, the informally provided friendly information is much appreciated.

[sojournermike]

Looking for pension suggestions for a young person (23) who has a one year set of contributions that he can't leave in the employer scheme, but wants to make sure that he gets the best long term benefit from the year's money. Eventually he might be lucky and go back to the same employer permanently but they won't let him leave the money in the there unless the employment was 2 years.

I can't see why the employer is stating he has to be there for 2 years, for the money to remain in the company scheme.  There's no legislation requiring that. 

How large is the employer, and when did he join their scheme?

For actually investing the money, if it is transferred, then long term, provided he's happy with the risk, then a low cost, market tracking equity investment would make most sense.

It is correct that the law doesn't require members of occupational registered pension schemes to be forced into a refund of member contributions or a transfer value if they leave active membership within 2 years of joining. However, it permits this as an administrative easement, to avoid the need for employers to pay the costs of maintaining records etc for tiny benefits. It used to be 5 years and the requirement to off a full Cash Equivalent Transfer Value after 3 months is also fairly recent in terms of my 'career'