Taking out an additional pension

sirhan_sirhan

Newbie here, I have had a look through a good number of threads and can’t see a similar question having been posed, apologies in advance if I have missed one.

A bit about my background first:

I am 34 years old with 2 children.
I have a good company pension, with the company paying in 15%, I top up an addl 2.5%.
I have no mortgage
I have savings in excess of £100k (cash)
I fully exercise my ISAs
My incomings exceed my outgoings by approximately £1000 per month

I would like to put some of this money aside, so as to make my old age more comfortable than it might otherwise be, although I think that my company pension should be more than adequate (not sure of the fund amount, it is probably in the region of 75k at present).

I have been thinking about opening an additional pension, possibly to enable an earlier retirement than might otherwise be. Would this be a sensible course of action?

Ideally I would like the ability to vary payments if need be (you never know what is around the corner!) and would like any fund to be reassigned to my partner and/or children in the event of anything untoward happening to me.

I also have a couple of smallish (20k total) funds from previous employers that I might want to roll-in with this.

Would appreciate any advice as to a suitable vehicle for achieving the above goals.

nielingren

if i was you i would not get another pension.

75k pa and 100k in cash is better than 100k pa and no savings get to 65 or sooner and take long hoildays :cool:

oh one more thing thats an odd pension mine is i put ion 6% and my work puts in the same up to 6%

dunstonh

I have been thinking about opening an additional pension, possibly to enable an earlier retirement than might otherwise be. Would this be a sensible course of action?

Could be. Although unit trusts/OEICS or ITS could be better. It really depends on whether you accept annuity purchase will happen with the pension of you want to keep your capital.

Ideally I would like the ability to vary payments if need be (you never know what is around the corner!) and would like any fund to be reassigned to my partner and/or children in the event of anything untoward happening to me.

On death, there is no difference. Whatever the value on day of death, that is the amount payable. Flexibility is far greater outside the pension than within it.

Would appreciate any advice as to a suitable vehicle for achieving the above goals.

We cant give advice on regulated areas like this. We can discuss options but it is not advice. The UK has around 13 different tax wrappers. Each has its pros and cons. Some will be available to you, others wont. Some suit a niche market, others are mainstream. We dont know enough about you to say which would be best. Hence why giving advice is inappropriate (as well as being against FSA rules).

What you want to do is invest the money. Forget pension for the moment as they comes in when choosing the tax wrapper. First and foremost is investing. How do you want to invest, what sort of accessibility do you need/want. How do you want the proceeds paid? Is your spouse utilising any retirement planning to utilise her personal allowance in retirement (if its all your name, then you will end up paying over £1000 in tax just for making it lop sided).

Do you want to invest in shares, unit trust funds, investment trusts etc? Once you have decided these things, then you can look at tax wrappers and you may find that the pension tax wrapper is suitable for you but you may find it isnt.

sirhan_sirhan

Thanks for the responses. To clarify though, I am not looking to touch the savings that I currently have, I am looking to fund the additional pension from the surplus funds that I have each month after all of my outgoings.

My partner has no pension fund whatsoever, hence putting something into her name might be an option. Didn't think of that one.

Tax wrappers...OEICS...

...at this point my eyes begin to glaze over! Have been here before several times over the past few years and each time get put off by the fact that I don't really have a clue what anyone is talking about!

Perhaps the discussions here might be a bit out of my league, if this is the case I would appreciate being pointed towards an idiot's guide or similar.

If anyone has some other options (not advice!), I would be grateful.


Thanks in advance.

clairehi

sirhan_sirhan wrote:

My partner has no pension

.

You should definitely be looking at retirement planning for her (or rather she should!). Both to make use of tax allowances, and also to ensure that she will be provided for adequately if you pop your clogs - sorry, has to be said though...

dunstonh

My partner has no pension fund whatsoever, hence putting something into her name might be an option. Didn't think of that one.

Vital.

...at this point my eyes begin to glaze over! Have been here before several times over the past few years and each time get put off by the fact that I don't really have a clue what anyone is talking about!

Perhaps the discussions here might be a bit out of my league, if this is the case I would appreciate being pointed towards an idiot's guide or similar.

Are you sure you are ready for DIY. If it starts getting confusing at these stage, then there is an awful long way to go from there.

You could go simple and pick a stakeholder and stick it in the bog standard fund. It wont be the best option but its simple. Do you want best or simple?

Here is a site that gives you some of the basics. http://www.incademy.com/pages/home.htm?ginPtrCode=10002

However, you may want to decide whether you are ready for DIY or not. I dont service my own car because I dont have clue and dont want to. It may be cheaper if I did but I would probably make a pigs ear of it as well.

EdInvestor

You have a lot of cash savings, are they in cash ISAs ( 3k a year) ?

Have you put any money into the investment "mini" ISA which is also available - up to 4k per year?

Within the mini investment ISA you can invest in different assets such as property funds and bond funds, shares, and equity funds.These vary from low to high risk.

Possibly you should start one of these mini investment ISAs in your wife's name? If you put in 4k, you could invest in 4 funds, 1k each. You could perhaps pick one property fund, one bond fund, one equity income fund (the lower risk type of shares) and one other: perhaps a foreign fund, or an index tracker fund.

If this appeals, it's important to open your ISA account with a discount broker, so you dont pay initial investment charges, which are high.

Here are some dicount brokers.Their sites may also give you some ideas about good funds.

https://www.h-l.co.uk
https://www.chelseafs.co.uk
https://www.cavendishonline.co.uk