2 buy or not 2 buy

needtosavemonies

hello all.
like most young people i still do not have a pension set up:mad:, and the recent credit crunch is making me think perhaps now is a good time to put a lump sum into a fund ~5k.:eek:

i presently have a ltd company and would like to set up a private pension through it for tax allowances. because the way shares are currently performing do you think i am better of investing a lump sum (more bang for my buck) or will that make no difference to making monthly contributions in the present economic climate. once stability returns to the markets i would then return to making monthly contributions.

secondly if decide to wind up my company can i transfer the private plan from the company directly to myself. i am seeing a IFA shortly but i wanted to see what other pople thougth before making any decisions.

cheers,

dunstonh

i presently have a ltd company and would like to set up a private pension through it for tax allowances. because the way shares are currently performing do you think i am better of investing a lump sum (more bang for my buck) or will that make no difference to making monthly contributions in the present economic climate. once stability returns to the markets i would then return to making monthly contributions.

Very logical approach. Shares are 40% lower than just over a year ago so and you are investing long term. Even the doom mongers dont have the FTSE much lower than it is currently. Although very long term (which retirement planning usually is) it doesnt matter if the FTSE is 4000 now or 3500. Also, that assumes 100% into the market. That may or may not be what you choose to do depending on your risk profile.

secondly if decide to wind up my company can i transfer the private plan from the company directly to myself

It will be an individual scheme taking employer contributions in your case. It isnt linked to the company in anyway. It is linked to you as an individual. Future employers could pay into it or you yourself. Modern schemes are much more flexible than those many years ago.

needtosavemonies

thanks for that. you say it wont make a difference but suely the whole premise of a pension is to gain over time. by investing more now when the market is performing less well surely the gain i will achieve in say 30 years will be better than if i invested conservatively assuming 100% in share investment! a differnce of 500 points which you use as an example is a potential 8% gain!.

this may sound stupid but if one was to invest lump sums everytime the market cyclical dive (e..g 5-10years) then the potential return would be better than investing monthly into plan.

dunstonh

by investing more now when the market is performing less well surely the gain i will achieve in say 30 years will be better than if i invested conservatively assuming 100% in share investment! a differnce of 500 points which you use as an example is a potential 8% gain!.

A potential 8% gain on the intial amount invested over 40 years.... Small difference.

this may sound stupid but if one was to invest lump sums everytime the market cyclical dive (e..g 5-10years) then the potential return would be better than investing monthly into plan.

When would you know to invest? When is the bottom? Trying to time the market is futile. You will get it wrong as many times as you get it right.

The more important thing is to balance your portfolio so you move funds into the lower risk side in the good times and feed it back in during the bad.