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Consumer Question:
I’m in my early 40s and have just become a mum of twins. My husband and I have also only just recently bought our first home – with the help of a large mortgage. We’re both in good steady jobs and I’ve been saving into a pension for the last five years – but I’m worried about the impact of these new and late financial commitments on my pension, as well as my ability to save into it. How do I ensure the double whammy of buying a home and having children so late in life doesn’t impact my retirement income?
Answer from Mark Reilly, Pension Proposition Lead at Royal London Ireland
The two main types of personal pensions are Personal Retirement Savings Accounts (PRSAs) and personal pension plans (or retirement annuity contracts). If your son opts for a PRSA, he will need to decide between a Standard PRSA and a non-Standard PRSA.
If he is new to pensions, a Standard PRSA could be the more straightforward and easy-to-understand option. Furthermore, with a Standard PRSA, fees are capped so he can't be charged more than a 1% annual fund management charge while the contribution charge cannot be higher than 5%. With personal pension plans and non-standard PRSAs, the charges can be higher or lower than those of a Standard PRSA – however, there is usually a greater choice of investment funds in which to put your money.
A full register of PRSA products and providers can be found on The Pensions Authority’s website.
You usually need to go through a Financial Broker if opening a PRSA or personal pension plan as it is often not possible to open such products directly with the life assurance company.
A Financial Broker will help him calculate how much he will need to save in order to build up a sufficient pension pot and will also provide information on the type of investments available, and the associated fund management and contribution charges. Pensions are a complex area – so your son should not be afraid to seek financial advice before choosing a pension product.
ENDS
This question was submitted to and first published by The Irish Independent
About Royal London Ireland
Royal London Ireland has a history of protecting its policyholders and their families, and it is committed to continue to do so for a long time to come. Our heritage in Ireland is 190 years starting when the Caledonian Insurance Company's first office opened on Dame Street, Dublin 2 in 1834. Today, Royal London Ireland is owned by The Royal London Mutual Insurance Society Limited – the UK’s largest mutual life insurance, pensions and investment company, and in the top 30 mutuals globally, with assets under management of €197 billion, 8.5 million policies in force, and over 4,400 employees. Figures quoted are as at 30 June 2024.
Royal London Ireland’s office is based at 47-49 St Stephen’s Green, Dublin 2.