why don't you just go to an advisor and let them do all the work for you?
1: A PRSA might be the more appropriate route for you as you might be combining transfers from occupational arrangements in the future. Although there are additional rules around this and it’s not always possible to do.
It is possible to arrange for your PRSA to be linked to your employer so for the periods while you are employed the ER could contribute to the PRSA as opposed to contributions being collected from your on DDM. The life providers can all do this, not sure if Davy have this flexibility.
2: I haven’t seen an execution only PPP done but in theory it’s possible. Any broker should be able to set up an execution only PPP for you as long as you know exactly what you’re looking for.
3: Broadly, in my opinion, personal pensions are better than PRSAs but for the circumstances that you have presented I think the PRSA is more appropriate for this situation as long as you use it to the best of its flexibility.
4: You can transfer OPS benefits into a PRSA subject to certain rules: less than 10K, less than 15 years service etc. As mentioned above a PRSA can collect contributions directly from an employer so that might be something to consider.
5: PP & PRSA at same time: yes
6:Yes pension investments grow tax free
7: I could write an essay on this. It comes down to how much you know in my opinion. Pension regulation, options, planning etc is difficult and likely to become more so. If it is not your main profession and you end up giving up time to dedicate to monitoring your pension personally you need to think about that.
8: yes it’s easy enough to switch between companies.It generally takes 4 weeks (on average) owing to turn around times in the market.There are a few steps required, easy when you know what you are doing. Might not be as simple on an execution only basis.
9: You can transfer a PPP to a PRSA but you can’t transfer a PRSA to a PPP.
10: Tax relief is annually. You have until 31st October 2020 to claim tax relief for 2019. If you start today & register contributions for December revenue will apportion tax credits accordingly on My Account. Given your changing employments it’s important that you ensure all relief is fully claimed before you change jobs - just a technicality, you can’t back claim relief for contributions made while self employed if you are now in PAYE employment.
These things are all nice to know but really this is a job for an advisor. Well done on making inroads on building your journey but it’s not just about getting the product right.
Begin with the end in mind!
1. What is ER and DDM?
10. Ok, I didn't realise it was annually. So I have just missed adding 2018 pension contributions then.
I would prefer to choose the investments myself.
- I'll be buying just two funds: Total Equity UCIT ETF & Total Bond UCIT ETF.
When you are contracting, do you have a limited company for that? If so, you can set up an Occupational Pension Scheme (OPS) now , cease contributions to it in the future if you go into a full-time job with pension scheme and then if you go back to working through your limited company, you can re-start contributions and (if you choose to), transfer the fund from the "job" pension scheme into your own scheme.
Correct. Be aware that a contribution by an employer (or by your own company if you have one for contracting) cannot be backdated into previous tax years for tax relief purposes. You can only claim tax relief on an employer / company contribution in the tax year in which it is physically made. So any employer / company contributions for 2019 need to be made in the next couple of weeks.
Given that your choice of funds is quite a straightforward one, you might find that instead of setting up a self-directed plan (e.g. Davy) you could achieve the same result at a lower cost with an "insured" arrangement e.g. a Standard Life PRSA, Personal Pension or Occupational Pension Scheme investing in Vanguard index-trackers. Other companies also offer index-tracking funds, e.g. New Ireland with State Street index-trackers.
Ask the advisor to compare a Davy example, showing the cost for the Davy platform + the cost of the ETFs with the total cost of an insurance company equivalent.
Are OPS's much better than a PRSA or personal pension? What benefits would I get through setting up my own OPS?
To be honest once I can invest in total stock market and total bond market index tracker and it's low cost and passively managed I'm happy.
If the Standard Life PRSA has an index tracker that is less expensive than a non-standard ETF index tracking fund I'm fine with that.
It's just from what I've seen most annual fund charges are 1%, while the Davy-Select non-standard PRSA is 0.75% so it looked like the best value.
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