A simple pension where I can pay in £50 a month - is there such a thing?

[thekitchensink2]

I don't have any sort of pension at all and have decided that something, however little, is better than nothing. I can commit £50 a month for now, until I qualify (am currently a full time student) and hopefully get a job!

I want something simple to understand and operate that I can open online.

Is there such a thing, or would I be laughed out of the bank website?

Thanks

there are plenty of them - you want a simple stakeholder. Look for low charges and online access. I have one such pension with Aviva but there are loads of others.

at the moment the government will top up what you put in by 20%, speak to the pension people to ask about making this happen. Even if you earn zero, you can put in £2880 per year and the government turns it into £3600. But £50 a month is still a good start and it has a long time to grow.

There are loads out there, like pp said, a simple stakeholder could be an option, with investments where you only pay annual management charges on the funds, no silly admin charges. Every pension provider has them. I can guarantee nobody will laugh at you. If anything, is admirable that you're planning for the future when you don't have a lot of cash to spare!

Yes there is I have one too. The returns aren't looking great but I also have a couple of work pensions and other investments. So it is only one part of the pension pot and at the time I started it £50 was all I could spare too. Better to do something like you say.

STAKEHOLDER PENSIONS ARE EXPENSIVE !

Please shop around. Admin fees can be cheaper than the 1.5% fee charged on a stakeholder. I have a 0.25% admin fee on the pensions I sell, then about 0.32% on the funds. MUCH MUCH less. Look at TOTAL cost.

Stakeholders are out of date after 2013 changes.

Stakeholders USED to be 1% new ones are 1.5% for the first 10 years - before anyone tells me theirs isn't

If stakeholders are expensive, what are the other options? And will the Government still top up on the other kinds? (I'm 36 and just starting to think about these things - literally just started to think about it when I clicked on this thread!)

You could also have a personal pension. You will get the 20% top up on your contributions up to £40,000 per year (or £10,000 if you've already accessed any of your plans flexibly, which won't be the case when you're only 30something).
It definitely pays off to shop around but I would also look for "hidden" charges, for example admin fees seem low but they charge you a fortune if you want to switch funds. You can also transfer from one provider to another if you're unhappy anyway, so I would also check for any penalties/exit charges.

wowser, that is a huge charge! Thanks for flagging that up.

the charge on my stakeholder has actually dropped now but that's because there's a certain amount in it and I've had it more than 10 years. The OP won't be able to pay in that much on a student income.

Seen anything suitable for us yet OP?

I saw this thread on MSE, same topic forums.moneysavingexpert.com/showthread.php?t=5344047&page=2

A bog standard personal pension is as good as anything. The stakeholder business is a red herring now (they were OK, but the market has moved on for new contracts). If I had to put a small amount of money away, without much understanding (without wishing to be rude), Royal London would catch my eye. Their 'Governed' range is good. I have to caveat that with, I'm an adviser and so the charges I see are possibly different to joe public, but I can set these up with a 0.4% charge, all in. They manage the funds so 'advice' is included.

Pensions are in a real purple patch, tax beneficial, flexible, protected... all good stuff. You can't rely on the state making provision much beyond penury.

SIPP's are also a bit passé (they were quite the thing about 7 years ago). MOST people don't need them, bog standard I think covers >99% of the market.

What about ISAs ?

Tax free

Accessible money

I have had such a hectic couple of days and didn't think I would even get any responses! Thank you so much - it's brilliant to know that I do have options and that it's not such an unusual thing to ask! Going to have a good research over the weekend and see what I find. Honestly I want to try and find a fee-free one though not sure if that's even possible!!

Something else I thought of - can you buy stocks and shares with a similarly low level of cash? You know, nothing I would be too gutted by losing but still with the fun of seeing if things do go up in value?! Is it possible to do that?!

whoosh - not rude at all Thank you for the advice!

I have to say, "the government pays 20% on top" really makes me laugh and go at the same time, because they tax you straight back again once you receive it, right?! What's that all about!

That MSE thread is interesting Moriarty, if only for the other posters' responses! "£25 isn't enough! You should be investing £300 a month!" Well yes, in an ideal world! This thread has been far more helpful and no one has said "don't even bother!" like they did on MSE. Obviously once I am employed I will be increasing contributions appropriately but for now surely something is better than nothing.

Regarding the 20% top up and tax deductions - you are entitled to 25% tax free lump sum on your pension, so it actually isn't as simple as that.

because they tax you straight back again once you receive it, right?! What's that all about!

If you have a low total income from pensions, perhaps because of taking it out slowly you won't get taxed at all much less at a full 20%.

I thought it was a jolly good deal I put in £100 & govt added £25 of govt money, because I wasn't earning. Bit of a no-brainer.

How old are you, OP?

stocks and shares ISAs are definitely worth a look, again thinking very long term. Again, look hard at charges.

cash ISAs are now bordering on not worth it - if you earn under £15,600 a year you don't pay tax on savings anyway, and next year the first £1000 of savings interest will be tax free for anyone. Cash ISA rates are pitiful so most can do better in an interest-paying current account.

but for the OP and long-term investment (not savings) it is a pension or stocks and shares in some form, I think.

I'm nearly 33 Trout! I have nothing in the way of an existing pension at all, at all.

DH has about 20k apparently in a pension, but it was invested before we met, and I am not entirely sure things will last, so starting to think about protecting myself and setting things up for the future.

OP, I have an investment ISA with Sheffield Mutual. What that means is that I set up a direct debit for an amount I can afford to lose. What Sheffield Mutual does for me is invest my money in shares. It is a high risk investment, in other words it could perform so bad I could be left without a penny, equally, I could get a modest profit at the end of the year.
I can thoroughly recommend them: no jargon, real people at the end of the phone, it is a small business and their performance has been constantly good in the past few years.
What are you studying? I am only asking because if it is the NHS, if you are on the bank you can actually join the scheme whilst you're studying. So a few shifts here and there would give you access to a quite good pension.

I think the is a option is better, you can access for a rainy day then.