[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]
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[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]
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[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]
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[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]