Do we need a pension?

L

Lou26

Registered User
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Hi. I am hoping someone can help me with a pension query.
I am currently living with my boyfriend. He is an electrician and currently has the CIF pension (I no very little about this but by all accounts it's not great as a pension). He is recently qualified and earns 40,000. He pays around 50 a week for his pension.
I earn 28,000 gross and my pension is 4% and the company put it 6%. I earn about another 7000 on overtime but the pension is only on my gross wages. We just bought a house so at the moment I cannot afford to increase my pension contribution.
My query is do we need another pension for my boyfriend? I would like him to get a personal pension but he is under the impression that because I have one at work we will be fine.
We have little savings after buying the house (around 8000) but hope to build this up again. Our home was bought with 92% mortgage and we have no other loans. We paid the deposit and stamp etc from savings. I am 26 and he is 27.
Thanks!!!
 
Hi Lou - your boyfriend would not be allowed to set-up a Personal Pension because he is already in 'Pensionable Employment', you can only have one pension per employment, he could put extra contributions into CIF fund?
 
Can somebody in pensionable employment not also have a PRSA or personal pension plan for AVCs?
 
A Personal Pension - no.

A PRSA - I think that if the plan already allows for AVCs then it is up to the trustees whether or not a member may make AVCs outside of the plan, in the case of the CIF Plan (which is relevant here) the answer is most probably no.
 
I think there is scope for a prsa where the employee has some income outside his employment. This would be very common in the building trades.
 
Yes, of course, for any income outside the 'pensionable employment' a separate pension can be established...so long as it is declared income.
 
Thanks for the replies. I suppose my main query now would be would we have to increase his contributions or would mine be enough. Is it feasible to live on one pension plus old age? I will probably increase my contributions next year once we get through the first year paying the mortgage etc. My company (private sector) will always give 1.5 times what we give.
He doesn't do enough outside employment to make it worth his while having a separate pension. Maybe one "foxer" every couple of months or so.
 
Lou26 said:
Thanks for the replies. I suppose my main query now would be would we have to increase his contributions or would mine be enough. Is it feasible to live on one pension plus old age?
Click to expand...

It's certainly feasible, in fact lots of people get by just on the Old Age Pension but it's matter of looking at the numbers and deciding if the drop in income you'll experience when you retire allows you to have the lifestyle you want. Lots of people retire early these days, some from ill-health, some from choice, others because they are made redundant so the conservative approach I think is to assume that this will happen say at 55 and that one or both of you will drop out of the workforce. There'll be no State Pension for another 10 years, you may still have a mortgage to pay and possibly a dependent in the education system. If you really want to be depressed ask yourself what would happen if one of you is alone when pension collection time comes along (sorry, but it does happen!).
 
Lou - it would be better for you to do the AVC than your b/f - given (that you stated) that your employer will match your AVC and add on 50% too, that is a great deal!

Also, note that current state pension for married is over €16k, together with the pension your b/f gets from CIF and you get from your own employer (even if you do not AVC) would put you well ahead, in terms of pension provision, of "the man in the street".

But, given your favourable AVC deal with your employer, AVCs from you are more useful to you than those from your b/f - the CIF does not match them.
 
Yes but the max pension that Revenue will allow a person fund for is 2/3rds of final salary, so it does not make sense!
 
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