ISAs v Pensions: The Official Retirement Debate

Simonsays_2

I refer everyone to this article;
http://www.thisismoney.co.uk/pension...5&in_page_id=6

If this is true then I would stick to investing in a Stocks & Shares ISA & take my chances!

jem16

Simonsays wrote: »

If this is true then I would stick to investing in a Stocks & Shares ISA & take my chances!

The exact same funds and therefore the exact same charges are used in both S&S ISAs and pensions. The only difference will be how the tax is handled.

Simonsays_2

So I guess it only leaves looking at funds that have low charges like Skandia, ATP or perhaps investing in an ETF?

jem16

Simonsays wrote: »

So I guess it only leaves looking at funds that have low charges like Skandia, ATP or perhaps investing in an ETF?

I think you are being a bot oversimplistic with regards where to choose.

Skandia for example is only available via IFAs. As well as the amc you will have to factor in the cost of advice. Over a certain fund value, Skandia could well be cheapest but it could be more expensive for lower fund values.

You also have to be careful not to let the charges make the decision on the investment funds. Yes the charges will be important but more important is the actual choice of funds.

Simonsays_2

Thanks, yes everything has it's ADV & DisADV. It's a real mine field so you may take a dart & throw it & see where it lands. What have you got to loose other than the cost of charges!

jem16

Simonsays wrote: »

What have you got to loose other than the cost of charges!

The cost of your investment through bad landing of your dart. Investments do go down as well as up.

Seriously see an IFA and get some help.

dunstonh

Simonsays wrote: »

I refer everyone to this article;
http://www.thisismoney.co.uk/pension...5&in_page_id=6

If this is true then I would stick to investing in a Stocks & Shares ISA & take my chances!

The company that did the research has pulled their report and admitted it was based on flawed data. The media articles ought to be pulled as well but the the fact the "facts" are wrong doesnt stop the press.

Charges are a bit of a red herring.

Would you prefer 10% after charges of 1.5% or 7% after charges of 0.3%?

The net interest margin on savings accounts is typically around 1.3% (lower currently). So, many pension funds are cheaper than you savings accounts.

Charges are important. The days of 2% plus are not justified any more but 1.5% or lower for managed or less than 0.5% for trackers are fine.

LongTermLurker

Simonsays wrote: »

Thanks, yes everything has it's ADV & DisADV. It's a real mine field so you may take a dart & throw it & see where it lands. What have you got to loose other than the cost of charges!

So do a bit of both - are you employed? (I've lost track of your first question) - pay into your company's pension if they have one and accept their contribution; in any case, benefit from the tax incentives.

And at the same time, start a S&S ISA, using an IFA if you don't have the confidence to DIY. That way you get the best of both worlds - free cash going into your pension and accessible tax-free cash from your ISA.

If you pay high rate tax, the pension's a no-brainer.

Simonsays_2

Thanks, I am emplyed but we are a small business and have no company pension. I did have a company pension from my first job it's in the Aegon SE Mixed fund and has a value of £13337 & I also started a personal pension with Equitable Life European it has a value of £21502. I am not contributing into either but wanted to consolidate them into one i.e.into the Aegon SE. I am currently contracted "in" to the State Pension. Can you make any suggestions? Thanks

LongTermLurker

Simonsays wrote: »

Thanks, I am emplyed but we are a small business and have no company pension. I did have a company pension from my first job it's in the Aegon SE Mixed fund and has a value of £13337 & I also started a personal pension with Equitable Life European it has a value of £21502. I am not contributing into either but wanted to consolidate them into one i.e.into the Aegon SE. I am currently contracted "in" to the State Pension. Can you make any suggestions? Thanks

If you aren't currently contributing to either, they'll be termed "paid up" and won't usually allow you to recontribute or transfer in.

Nothing wrong with having more than one pension as such, it helps diversity. Aegon seem a good company, but not so sure I'd want to stay in Equitable Life...

If you really wanted to consolidate them, you'd probably be looking to start a new pension and transfer one or both of the others in, but they're not small amounts and there's a lot to consider, so I'd definitely suggest you need to take advice on that one.

Others on here will have more specific suggestions.