pensions?help!?

Question

i want to start aprivate pension early,am 18,but would like it with predensal,dont no how its spelt lol anyway,by the time i get to 65 it will be 50years time,how do i know the company or any company i go with will be around for 50years???

Answer 1

UK = I assume you mean SIPP.

Good idea !

I suggest choose a SIPP with one of the majors - for example Barclays - should they do a 'Northern Rock' in the future you can be sure the Government will trot out a 100% guarantee whilst you transfer your funds somewhere else ..

Early contributions count the most .. a few quid tucked away now will be worth 3 or 4 times what you can tuck away after 40 .. (and what you save at 40 is worth double what you save at 50)

Answer 2

That is a fantastic idea. I invested $5000 in a managed fund when I was 17 and when I bought my house ten years later it was worth nearly $20 000. I would see a financial planner (you can usually see one at your bank for free) and get them to look at your situation, and how comfortable you are with risk.

The earlier you invest, the more time your money has to grow. For instance, at an interest rate of about 6%, your money will double in 12 years. At 7%, in 10 years. At 8%, in 9 years. The earlier you invest, and continue to add to your investment, the more times it will double. At 18 you have at least 45 years for your money to double, and you can afford to invest in some higher risk areas (like emerging markets such as China, or the share market)

Managed funds are a good way to invest, because they're a bit like a bank account. A company buys heaps of shares in heaps of companies, issues units (say they invested 1 mil, and each unit was worth $1,) and then you 'buy' these units when you invest, although it's more like a special bank account. When the share market goes up, your investment goes up. If it goes down, the value of the investment goes down. However, after every stock market crash, there has ALWAYS been an even bigger boom. ALWAYS! So don't pull your money out if the share market gets jittery, because then it doesn't have a chance to increase in value.

There is a great book called "The Barefoot Investor" by Scott Pape, which is an Australian book, (I'm an Aussie, but these ideas will work in any country) which basically says you can set up a managed fund (might be called something else in your country) and direct debit $100 a month into the account. This means you will invest more money on average when the unit price of the fund is lower, which means your investment will be worth more in the long run.

Good luck

Answer 3

By "private pension" I'm guessing you mean an IRA. You can do that if you have earned income. See www.ira.com.

Answer 4

you don't but i have had them since 1958 and that is almost 50 years (prudential)!!!