Company Pensions 2012?

dunstonh

personal allowances in retirement can impact on the fine tuning as to which option you should use (although not in the case of the OP as there wont be any personal allowance left over). Much in the same way IHT can impact (pension is outside of the estate, ISA is not - crystallised pension is subject to 55% tax on capital return but by the time you factor in tax relief and the 25% tax free lump sum is taken, that can actually end up less than the 40% IHT).

hugheskevi

In the case of JoeCrystal (and others) it may not be irrelevant as the state pension would be around £7k/£8k (basic plus additional) leaving approximately £3k/£2k to use against the pension income.

What I'm saying is that the higher personal allowance is irrelevant to the comparison of a strategy of putting money into a pension now versus putting the money into an S+S ISA first, then into a pension later.

The higher personal allowance is not irrelevant in general, and is an important factor in making pension decisions.

This is straying massively from the OP's original post on a theoretical point and clearly causing confusion, so I'm going to leave it after this

Lokolo

hugheskevi wrote: »

What I'm saying is that the higher personal allowance is irrelevant to the comparison of a strategy of putting money into a pension now versus putting the money into an S+S ISA first, then into a pension later.

The higher personal allowance is not irrelevant in general, and is an important factor in making pension decisions.

This is straying massively from the OP's original post on a theoretical point and clearly causing confusion, so I'm going to leave it after this

Ah.... sorry, I thought you meant that personal allowance is irrelavant to putting money in an ISA or a Pension

Melmar

hugheskevi wrote: »

To know where to turn, you need to know your destination

.

Ok going back to what hugheskevi said about knowing your destination I'm trying to work out how much I have as a pot. Does anyone know waht an indexed linked pension of £1836 in 1991 would be worth today?

jem16

Lokolo wrote: »

Ah.... sorry, I thought you meant that personal allowance is irrelavant to putting money in an ISA or a Pension

So did I. Glad we have now sorted out that confusion.

Lokolo

Melmar wrote: »

Ok going back to what hugheskevi said about knowing your destination I'm trying to work out how much I have as a pot. Does anyone know waht an indexed linked pension of £1836 in 1991 would be worth today?

It maybe worthwhile phoning the pension company to ask as they would be able to give you an exact number!

Melmar

Hopefully I've done the right thing. I've tried to hedge my bets by investing £3,000 in a S&S ISA and taking out a stake holder pension aswell.

jamesd

Melmar, stakeholders usually aren't a great deal these days, largely an obsolete product. Some, like Virgin's, are particularly poor deals. What investments are you planning to use? If it's something like a FTSE All Share Index tracker we might well be able to find you a better deal.

There's really not a great reason to use a pension at the moment. Plenty of time to do it later once you're in a nice work scheme or earning enough to get 40% tax relief. Just be sure that you use investments within a S&S ISA not a cash ISA.

Melmar

Hi, The plan is to put £50 a month into an AVIVA stake holder pension. I have also put £3000 into the lowest category of risk Barclay's S&S ISA.

I am concerned about the AVIVA stake holder pension though. Wondering whether or not its worth it and whether or not I shouldn't just wait a few years until my company have to have a pension in place.

jamesd

I'd wait for the work one personally. So long as the money is invested somewhere it doesn't make a great deal of difference over a few years.