M
munster man said:I have to agree with FLUFFY 47 how Cornmarket are so quick to pounce on all the young teachers starting out.
sunshine is a big fan of Cornmarket and has argued in favour of same versus fee-based brokers elsewhere on AAM.I think you may have advised her to do the wrong thing here. The earlier she starts contributing the better.
Another view:I think you may have advised her to do the wrong thing here. The earlier she starts contributing the better.
[FONT=Verdana, Arial, Helvetica, sans-serif]FOUR SITUATIONS WHEN A PENSION FUND MIGHT NOT BE ADVISABLE
[/FONT] [FONT=Verdana, Arial, Helvetica, sans-serif]IF YOU AREN'T CONTRIBUTING THE MAXIMUM TO YOUR SPECIAL SAVINGS ACCOUNT
The Special Savings Account is more tax attractive than contributing to a pension. Don't contribute to a pension if you are not putting in the maximum €254 per month into your SSA.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]IF YOU DON'T OWN YOUR OWN HOME
Your first investment priority has to be to own your own home. Many people start off a pension in their early 20s frightened by salesman's mantra : "You cannot be too young to start a pension". This should be rephrased "You cannot be too young to start saving". You will need all your money for a deposit on a house and that takes priority over everything including a pension.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]
[/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]IF YOU HAVE A BIG MORTGAGE OR OTHER BORROWINGS
After buying a house, your next priority is to get your mortgage down to a comfortable level. What is comfortable depends on a number of factors: The security of your job, your career prospects and the value of your home in relation to your mortgage. As a general guide, if your job is reasonably secure, anything over twice your salary is uncomfortable. Don't start a pension until your mortgage is down to less than twice your salary.[/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]
[/FONT][FONT=Verdana, Arial, Helvetica, sans-serif]IF YOU ARE PAYING TAX AT THE LOWER TAX RATE
Pensions are only attractive if they save you tax at the top rate of 42%. If you are on the 20% band, don't bother with a pension. You might end up in a situation where you save tax at 20% only to pay it at 42% on your retirement.[/FONT]
My daughter started work as a temporary primary teacher Sept.05.
A consultant from Cornmarket is in the process of signing her up for an AVC policy, but I have advised her to wait a few years before taking out this policy as she is very young (still only twenty). If she continues teaching she will have her full 40 years service at age sixty.
I need advice on this matter as she seems to have her mind set on signing up with Cornmarket. She is on a salary of €34,250 and was told she would enhance her lump sum by signing up now and would also receive tax relief at 42%.
I would appreciate any help on this matter.
Thanks Munsterman.
Oystermans point re retirement age is crucial to this-as the girl in question started her service after 1st April 2004 she may not retire before 65.
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