What to consider if you don't have a large income
Published 23/03/2010 | 05:00
WHAT if you don't have a pension yet, or can only afford to put away a small amount?
You could wait for the new public "auto-enrolment" scheme but there is, as yet, no firm indication of when it might happen. "It's possible that 20pc of taxpayers may decide to put off any pension contributions until the auto-enrolment scheme happens, although doing so means they will miss out on at least four years of pension contributions," says Liam Ferguson of Ferguson and Associates.
If it is at all possible, you should try to persuade your employer to provide you with a pension and pay all the costs of it in addition to maintaining your current salary, says Aidan McLaughlin of the Independent Trustee Company.
If your only option is to start a private pension or a PRSA, you should look carefully at the fees and charges.
Look at schemes with low and flat-charging structures, says Michael Kiernan of Myadvisor.ie. "What this gives you is a pension that can break even in the first few years."
A break-even point in a pension is where the premiums invested match the actual pension fund you have.
"We come across plans where the costs are prohibitive, leading to break-even points well over 10 years after the plans were set up," he says.