42 yr old in a pension panic

Imposter67

Now in my early 40s, I have a small teaching pension of around £8k, a company pension worth around £9k from my last job and since Jan 05 when I began my current job, no pension contributions whatsoever (the company did not offer any pension but has introduced an Aegon Stakeholder this year).

I am very confused about the best solution to get myself back on pension track. I have no faith whatsoever in the stock market pensions or stakeholder option.

I have started some ISA savings in the last 2 years but can anyone recommend a pathway that offers a way out of this "head in the sand" situation.

Any recommended pension schemes that are not too risky and even better, ethical, would be appreciated.

or should I go down the ISA savings route in view of fact that the limits are being raised next year?

dunstonh

I have no faith whatsoever in the stock market pensions or stakeholder option.

The stakeholder option is just a criteria for charges. It doesnt do anything else.

Any recommended pension schemes that are not too risky and even better, ethical, would be appreciated.

A stakeholder pension is fine for the inexperienced investor although you seemed to have ruled that out. Anything else is for the more advanced investor or someone with a servicing IFA.

or should I go down the ISA savings route in view of fact that the limits are being raised next year?

A cash ISA is fine but your lack of faith in the stockmarket does mean you are going to have to pay a lot more into it to cover the fact you are likely to get lower returns. You are in effect replacing investment risk with shortfall risk and inflation risk.

What has made you decide that there are only two options; cash and stockmarket? Why not fixed interest securities and property and why not have balanced spread that includes all areas rather than just one?

Thrugelmir

Imposter67 wrote: »

Now in my early 40s, I have a small teaching pension of around £8k, a company pension worth around £9k from my last job and since Jan 05 when I began my current job, no pension contributions whatsoever (the company did not offer any pension but has introduced an Aegon Stakeholder this year).

I am very confused about the best solution to get myself back on pension track. I have no faith whatsoever in the stock market pensions or stakeholder option.

I have started some ISA savings in the last 2 years but can anyone recommend a pathway that offers a way out of this "head in the sand" situation.

Any recommended pension schemes that are not too risky and even better, ethical, would be appreciated.

or should I go down the ISA savings route in view of fact that the limits are being raised next year?

Why the lack of faith in the stock market?

Imposter67

From all the media coverage lately, it seems that pension plans deliver less money than you put in.

Thrugelmir

Imposter67 wrote: »

From all the media coverage lately, it seems that pension plans deliver less money than you put in.

Over a long period with sensible investing there is a reasonable probability of achieving a better return than cash on deposit. Remember that the Government grosses up your contribution by 20%. Often employers will match employees contributions as well.

If you relied on the media coverage. Then you would assume owning property and renting it out is like a money printing press. Nothing is for free. The more you put in whether it be money or effort the better chance of a good return.

dunstonh

Imposter67 wrote: »

From all the media coverage lately, it seems that pension plans deliver less money than you put in.

Only if you read the wrong newspapers.

tawl_2

some might say that it is actually the best time to invest in stocks!

markets go up and down so now that it seems that we are at a downturn, stocks are considered 'cheap'... if you had cash in hand (so not affected by the downturn), some people may think that it is a good time to buy cheaply.

the theory is that you should look long-term and it is expected that stocks will do better in the long run than cash. Remember though that cash is easily eroded by inflation i.e. prices keep going up. you need to get something more than base rate to make a real profit!

Imposter67

Thanks for everyone's advice, but I get really confused when people start talking about "stocks" etc

What is the best thing to invest in, and by that, I mean something which is medium-risk and not unethical. Can anyone recommend a pension provider which meets this criteria and should I keep my 2 other pensions or transfer them/bundle up?

bendix

What do you mean by 'unethical'. Your definition of unethical might not match mine. There are some fund managers who will have so-called ethical funds which have rules such as not investing in tobacco companies and these can be wrapped into a SIPP, but given your apparent and self-admitted confusion over investments, I'm not sure a SIPP is right for you.

Better just stick it under the mattress and hope for the best. (and no, i'm not being serious).

tobiascurious

Imposter67 wrote: »

Now in my early 40s, I have a small teaching pension of around £8k, a company pension worth around £9k from my last job

Does this mean you'll get 8k per year when you retire, and a total fund of 9k respectively?

dunstonh

Imposter67 wrote: »

Thanks for everyone's advice, but I get really confused when people start talking about "stocks" etc

What is the best thing to invest in, and by that, I mean something which is medium-risk and not unethical. Can anyone recommend a pension provider which meets this criteria and should I keep my 2 other pensions or transfer them/bundle up?

How do you intend to purchase? There is no point someone talking about options that are not going to be available via a distribution channel you are not going to use.