£800/month to invest - ideas? high & low risk

calypso_rhapsody

You can start to draw on your SIPP at any time once you reach age 55 (unless the rules change in the next 14 years!). Perhaps if you delete 'retire' from your sentences and substitute 'draw my pension' you will find the right answer.

I have most of my investments in my SIPP - great tax relief on the way in (up to certain limits of course - do check these) and great tax shelter. But don't forget you will be taxed on the money you take out - except the 25% lump sum you can take when you first draw your pension.

By contrast, S&S ISAs give no tax relief on the way in but are tax free when you decide to 'draw' from them ...

So a bit of a mix and match may appeal!

evilplan

Thanks calypso - that makes it make more sense.

I'm stuck at the moment, trying to work out the pros and cons of SIPP vs ISA. I've looked at AVCs for my occupational pensions, but can't seem to see if I would get any particular benefit from those vs a SIPP. And I think we've established that I do like the "fun" element of monitoring "my" buys.

The key is the fact that essentially, a SIPP gives me a guaranteed 20% return on my investment cos of tax relief, vs the fact that I can only have 25% of it when I draw it, and have to stay alive for another 20 years or so in order to squeeze my money back out of it. That feels wrong to me - I think my potential to enjoy the money will diminish the older I get.

A SIPP is very, very tempting, cos of the tax relief and cos I can still have fun investing. But I think I'd like the option of taking the whole lot out at a time of my choosing.

evilplan

Actually I hadn't spotted your last sentence - there's no reason why I can't do both I guess.

If I do, then the annual charges come into play don't they - I'd essentially be paying twice, once for the funds in an ISA and once for the funds in the SIPP.

Jegersmart

evilplan

One major con of an ISA vs SIPP is that you can only invest 10.6k per year, the major pro is that you have access to your money when you need it. You have identified many others already.

When you mention charges I assume you mean the SIPP provider's charges and not the charges on managed funds you may have in there? If I were you I woudl look at Fidelity's SIPP - and compare carefully and go from there. Of course £45 or £200 a year is nothing when you consider the size of the pension pots are likely to be....however I don't believe Fidelity charge me an annual fee.....DYOR

aspiration_2

evilplan wrote: »

In my mind at the moment, I've got this:
.......
£200 into a bog-standard 60-day notice account at 5%
......

Hi evilplan. May I know which account you have referred to?

pdotie

aspiration wrote: »

Hi evilplan. May I know which account you have referred to?

I think the OP was referring to a savings account which he was able to access through his employment