Pension advice Zurich PRSA

curry_person

I don't know very much about pensions so would appreciate advice and some insight onto the subject.

I've been thinking about getting a pension for sometime, i would prefer one that would be managed for me. I looked at two different companies. New Ireland and Zurich. I particularity prefer Zurich as i know New Ireland was recently been bought out so i felt Zurich to be for now more sturdy for now. The plan offered was

Standard PRSA
contribution charge 3.5%
annual management charge 1%

What do ye think? is this a reasonably good deal?

Atlantic Dawn

Firstly have a look at the fund performance over the last 5 years or so and compare that with competitors funds. Standard PRSA's by law have a maximum annual management charge of 1% and contribution charge of 5%.

The main difference between the two is that the maximum charges under a Standard PRSA cannot exceed 5% of contributions paid and 1% per annum of the PRSA assets. There are some restrictions on the kind of assets a standard PRSA can invest in. You can read more about the differences between Standard and Non-Standard PRSAs in a Consumer's Guide to PRSAs (pdf) produced by the Pensions Authority.

http://www.citizensinformation.ie/en/money_and_tax/personal_finance/pensions/personal_retirement_savings_accounts.html

skippy2

"I don't know very much about pensions so would appreciate advice"..............first thing you should do is educate yourself by reading loads about Pensions so you know what you are getting into and be very aware of the impact of charges over the years. This is a long term investment and you must educate yourself this is your money and no one has more interest in how this is spent than you.......
Also look into how the different funds invest your money and what funds they invest in. Read some books on investing etc

The J Stands for Jay

curry_person wrote: »

Standard PRSA
contribution charge 3.5%
annual management charge 1%

What do ye think? is this a reasonably good deal?

Seems very expensive.

Merowig

McGaggs wrote: »

Seems very expensive.

But he will get advice for that money as well

curry_person

I'm very lost in all the jargon around pensions, all just appears to be a gamble haha.
I do plan on changing career when I complete. Current my employer doesn't pay any contribute to pensions. Am I better off waiting till I find a employer who does? I don't want to start this and get a better offer in upcoming years...

Carawaystick

curry_person wrote: »

I don't know very much about pensions so would appreciate advice and some insight onto the subject.

Standard PRSA
contribution charge 3.5%
annual management charge 1%

What do ye think? is this a reasonably good deal?

The contribution charge means for every hundred euros you save fo ryour pension, Zurich take 3.50

The annual management charge means they take 1% of the value of your fund each year, so as the fund grows over time, they get more and more of your savings.

okiss

Hi Curry person,

In regards to pensions you should look up www.pensionsauthority.ie as it has a lot of information about pensions.

In regards to contribution charge 3.5% and annual management charge 1%. These appear to be high.

If you contibute €100 only €96.50 will go into funds for you pension. over 20 years this could be €3.50 x 12 (months) x25 ( years)= €1050 less going into you pension fund. Annual managment charge is 1% - that is 1% of the value of your fund this could be a large amount in 20 or 25 years time.

How a pension works is the following
If you earn €350 pw and you pay in €30 a week towards your pension - you will not pay tax or prsi on this €30. If you are a low rate tax payer you 20% relief and a high rate tax payer you get tax relief at 41%.

So you get paid €350 a week - €30 for your pension = you then pay tax, prsi on the remaining €320 pw. Usc has to be paid on all income.

2. Your pension can be invested in a number of assets, cash, bonds ie goverment bonds, shares ie apple, property ie office buildings/apartments/reits.

My advice to you is if you are thinking of getting a pension to go to an indepdent financial advisor. They will look at your income, outgoings and advise you in regards to pensions, savings ect. You will pay them a fixed amount for this service but they will advise you what is suitable for you not what pays them the most commision.
Don't go to you own bank as they can only sell you their own products.

Alan152

Just In relation tomyout post Okiss,

How a pension works is the following
If you earn €350 pw and you pay in €30 a week towards your pension - you will not pay tax or prsi on this €30. If you are a low rate tax payer you 20% relief and a high rate tax payer you get tax relief at 41%.

Just a few pointers on this, there is no prsi relief anymore only tax relief and secondly top relief is 40% as opposed to 41%.[/B]