32 yr old part time worker wants to start 1st pension - Is it worth it?

[pudo]

I am a 32 yr old woman who is about to return to the workforce on a part time basis earning about 25,000 a year. I don't know yet if I will find a job that will contribute towards my pension. Realisitically, I can only afford to put away 6% of my salary as we're paying a large mortgage along with 2 lots of creche fees. Given the kids situation, I will probably be working part-time for the next 8-10 yrs and then I will go full time. I have never had a pension and I'm very anxious to start one up to safeguard my future financially in the case that my spouse dies or heaven above does a runner!! (Touch wood). At the same time, I'm concerned that the amount I'm putting away is relatively small and may not warrant a full pension plan as the fees would eat it all up anyway. I'd really appreciate your advice on this?

 

[ClubMan]

If your mortgage is large then you might want to concentrate on reducing that first before investing in a pension. It really depends on your overall financial circumstances. Have you read the AAM guide on this issue?

http://www.askaboutmoney.com/guide/ch02.htm
http://www.askaboutmoney.com/guide/ch11.htm

As regards charges there is no fundamental reason why investing relatively small amounts through a pension should cause you to be penalised on charges. As a general yardstick it is possible to get PRSAs with charging structures of 0% on each contribution and 1% annual management fee for a fixed once off arrangement fee of a few hundred euros.

 

[Fanny]

Maybe also take a look at Eagle Star investment products, some include a life insurance. If there are any fears as you describe below a life insurance in combination with other investment might be worth a consideration. If you want to invest into a cheap PRSA 0%/1% remember that direct deduction via payroll may not be possible and you have to choose the funds yourself. If you are on 20% tax a PRSA might be worthwhile, ask if your employer contributes, if you have an SSIA the 7000 EUR rollover government incentive might be suitable for you to start off with a lump sum, also compare PRSA and private pension e.g. Quinn Life (SSIA rollover possible too).

All the best from a fellow part-timer

Fanny

safeguard my future financially in the case that my spouse dies ?

 

[pudo]

Many thanks for your advice - it has really helped. Having had a good look at Quinn Life, I am going to go with their flexible pension. I'm very interested in learning more about investments plus it allows me to make the most of the money I put away without all the charges attached.