Not sure what to do

Mikki

Hello,

Looking for some advice about what would be best for me regarding retirement planning and my current situation!

I'm not working at the moment (full time carer for my son), but am planning to return to work in the next 5-10 years.

I do have a pension from an old job, and there is approx £4000 in it. I'm starting to panic about the future as I know how important saving for retirement is, but I'm not sure what is best for me to do at the moment!

I'm 36, and don't have a lot available to save at the moment, but could perhaps save £100 a month, which I know is nowhere near what I need to be saving. I'm assuming that once I'm back working I will be able to dedicate more money to my retirement planning, but I'm not sure if doing nothing for 5-10years is wise.

Should I transfer my old company pension to something like a SIPP, or just leave it where it is (invested in a Standard Life tracker I think)? Should I add £100/month to it, so at least there is something to build on over 5-10yrs, or just add the £100/month to my ISA? £100 a month isn't really very much - would it even be worth it in a pension with charges etc?

I know I will get tax relief if I add it to a pension, which seems strange (but good ) as I'm not currently paying tax - is that a good reason to go with a pension? Would a pension have higher charges than an ISA? I know that I will have access to the ISA if something comes up rather than locked away if I go the pension route, but maybe locking away is better! On the other hand, who knows what the rules will be in 30+ years time regarding pensions - maybe having control over an ISA is better?

What else do I need to consider? Probably worth noting that I'm also currently saving for a deposit for a house - the plan being that there will be enough there once I re-enter the job market and can get a mortgage. Should I just concentrate solely on this in the meantime, and then think about retirement plans once I'm back at work?

Thanks

atush

First of all, to help you we need to know more about you. You aren't working now, but will n 5-10 years? Why not work sooner? Do you have a spouse or partner that works? So they have a pension?

Do you have any savings at all apart from the old pension? You really should have 6 months spending in cashfor emergencies, and only then think about saving/investing.

If you have that, you can hae a pension now- just open a Stakeholder or private pension. you can contribute up to 3600 a year (2880 before tax grosses it up). Or you could save in other ways. Isas if you think you will pay tax soon, Cash savings into regualr savers ro bonds or an investment trust savings plan- I use this method of saving myself.

Mikki

Thanks. I'm single and have 3 months emergency savings.

I cannot work at the moment as I am a carer for my son, but when he's older and can take on some of the care and responsibilities himself, then I can return to work, which is why I said 5-10yrs.

Not sure what to do with my old pension - leave it where it is or transfer into a new personal pension? What's the difference between a stakeholder and a SIPP - do you have more choice of funds in a SIPP?

Should I just add my £100/month to an ISA and wait till I'm working again before worrying about my pension? I'm just worried about leaving it for 5-10yrs doing nothing!

atush

I don't think you need to think about ISAs if you won't be working for years. I'd look into a Stakeholder pension and contribute to that. And maybe an investment trust savings plan alongside. These can start from 20 quid per month.

A SIPP is more for those who want total control of their pension and will want to tinker with it. It can invest in funds, individual shares and other assets incl commercial property. If you just want to invest in funds, and want to put in a low monthly amt, you'd possibly be better off in a stakeholder. Each company/platform will have a different range of funds to choose from so use that in your selection process if you already have ideas.

Mikki

Me again!

Just a few more questions:

In a stakeholder pension, are you limited to just one fund, or can you have a few? If I opened a stakeholder, could I at a later date transfer it / change it to a SIPP?

Am I better off just sticking with my Std Life pension and making additional payments into it, perhaps changing which fund it's invested in?

Thanks!

jem16

Mikki wrote: »

In a stakeholder pension, are you limited to just one fund, or can you have a few?

Stakeholders usually oofer around 10/15 funds.

If I opened a stakeholder, could I at a later date transfer it / change it to a SIPP?

Yes.

Am I better off just sticking with my Std Life pension and making additional payments into it, perhaps changing which fund it's invested in?

Thanks!

Can you still pay into the company pension now that you are no longer working for the company?

If you can you need to consider funds available and at what charges to know if it's right or wrong.

jamesd

House comes first. You'll still have plenty of time for pension investing later. Just use the ISA for now. The savings from changing from renting to owning in many parts of the country can pay more than the growth of investments.

You can transfer from one defined contribution pension to one or more other defined contribution pensions whenever you like, including to and from stakeholder pensions, personal pensions and SIPPs. No limit on how many of them you can have at a time either and you can pay into as many as you like in the same tax year.