Am I saving wisely?

chesky369

I'm maxed out on ISAs; contribute £100 per month each to stakeholder and AVCs. I transfer £500 per month to my First Direct savings account (5%). Would it be better if I used some of this money to increase my stakeholder and/or AVCs for my retirement (3 years time). Or is there some other form of saving I haven't thought of?

dunstonh

I would review the AVCs as they are going obsolete from 6th April.
I would review the stakeholder as a contribution of £100pm means you can probably get better value on a personal pension (especially if more than 20 years to go until retirement).

HGLTsuperstar

Also look at changing the FD account, you lose interest each month you make any withdrawal despite it being "instant access"

chesky369

dunstonh - only three years to go to retirement, I'm afraid. So anything I do has to be really short-term.

First Direct - yes, I know I can't touch the money; it's a good discipline. I plan to run it until I retire (interest rates depending); then transfer it back to my ING account all in one go. well, that's the idea anyway.

dunstonh

3 years to go, then stakeholder wins that pension battle It may be worth revising your contributions into the AVC and switch to stakeholder. However, that depends on your AVC. Indeed, it may be even more sensible to boost your ISAs, even at the expense of AVC and stakeholder as you will need capital in retirement as well as income and ISAs can provide a tax free income as well.

chesky369

Can't do any more in ISAs until after April now but will then. Always do the max. But wanted to know whether my £500 should keep going into my First Direct monthly, or to a stakeholder.

thanks for your help on this dunstonh

homersimpson_3

I would review the stakeholder as a contribution of £100pm means you can probably get better value on a personal pension (especially if more than 20 years to go until retirement).

why and which personal pensions would you suggest- don't understand.