How to reduce tax

jem16

chrismac1 wrote: »

In 1990 I worked for a company who put in 5% if I put in 5%. It was with Scottish Widows. I asked if there were other options because I thought it was pants, they said no. I thought "Well I am doubling my money here so I can't lose" I was there 12 months in which time 2,000 went in. The fund statements have shown 1,900 valuation back in 2008. I decided to move out of this rubbish scheme into my SIPP, knowing full well that my own investments over the past 20 years have beaten the market 9 years out of 10, never mind lose money overall like Widows.

As you will know if you are doing your own investments, the pension is only the wrapper. It's the funds inside that count.

Now here comes the crunch - the Market Value Adjustment. £385 is the value if I transfer out of it. So essentially they are saying "We know we are pants and lots of folk will want to move out of us but we're going to trap you with our rubbish schemes."

An MVR is only applied to a with-profits fund. Were/are there not other funds to choose from?

Anyone reading this who does not think it is worth looking closely at every single pension plan they are in must be nuts.

I agree - you should look closely.

However to get the employer's contribution you usually have no choice of scheme - that's the employer's scheme. However you usually have a choice over funds.

evoscott wrote: »

Everyone keeps going on about a sipps is this the best kind and what does it stand for?

If you have to ask what SIPP stands for then no it's probably not for you. SIPP stands for Self Invested Personal Pension and is usually for the eperienced investor as you have to make the choices of what to put inside it for yourself. It gives a greater choice of the type of investments that you can place inside it.

What has happened now is that it has become fashionable but those using simply funds can probably find a personal pension cheaper.