Savings account or pension?

Matilda2703

Hello

Have a lump sum to invest, what is the best form of investmen? I would like to top of my pension as this needs topping up or are their better forms of saving for longer term? What are the best products on the marke?

Regards
Matthew

Annisele

Sorry - there's no one answer to that question. It depends on your attitude to risk, your tax position, your age, your existing assets and liabilities, and on many other things.

Generally, if you don't have enough savings to cover yourself if your income stopped for a few months, then stick it some in cash. Then, if you have debts and the interest rate you're paying on the debt is higher than the return you'd get if you invested, consider paying off your debts.

If you're talking a large lump sum, go see an IFA

Nosht

I use Premium Bonds regularly to store money for saving & withdrawing when its needed.
I have won £25 so far but you never know . . .
Certainly safer than the Lottery & winnings are tax free & very quick for withdrawals.

Regards,

N.

HappyMJ

Nosht wrote: »

I use Premium Bonds regularly to store money for saving & withdrawing when its needed.
I have won £25 so far but you never know . . .
Certainly safer than the Lottery & winnings are tax free & very quick for withdrawals.

Regards,

N.

And they pay next to nothing on average only paying out 1.5%

You would be much better off putting the money into a normal easy access ISA account paying 3.5% tax free and using the interest to buy lottery tickets with.

Matilda2703 wrote: »

Hello

Have a lump sum to invest, what is the best form of investmen? I would like to top of my pension as this needs topping up or are their better forms of saving for longer term? What are the best products on the marke?

Regards
Matthew

I would max out your ISA allowance first but it really depends on so many variables as to what is the best choice.

MoneySaverLog

Nosht wrote: »

I use Premium Bonds regularly to store money for saving & withdrawing when its needed.
I have won £25 so far but you never know . . .
Certainly safer than the Lottery & winnings are tax free & very quick for withdrawals.

Regards,

N.

Trouble with withdrawing is that once you do the bond numbers you have are deleted and never re-used. Ernie could pick them out and you'd never know but cause they are gone you wont win on them. So you keep them in the hope that one day Agent Million comes knocking at your door.

And yes I know the odds, but much better than the lottery where you lose your stake as well.

HappyMJ

MoneySaverLog wrote: »

Trouble with withdrawing is that once you do the bond numbers you have are deleted and never re-used. Ernie could pick them out and you'd never know but cause they are gone you wont win on them. So you keep them in the hope that one day Agent Million comes knocking at your door.

And yes I know the odds, but much better than the lottery where you lose your stake as well.

The odds of winning by purchasing a £1 premium bond is 1 in 24,000.

The odds of winning the lottery by purchasing a £1 ticket is 1 in 54.

To earn £1 a month in interest at 3.5% you would need £343 invested in a cash ISA.

£343 in premium bonds would reduce your chance of winning any prize to 1 in 70.

The odds are better playing the lottery with the interest earnt by investing in the ISA.

Ultrasonic

Surely you most likely to be best off by sticking the money in an ISA and not buying any lottery tickets at all.

atush

back to the OP.

First pay off all debt. Then, if you have 6 months cash saved, then you can think of pensions and investments. How much to each will depend on your short and longer terms need/plans for the money.

But it isn't an either or question. Put some in your pension and invest some.

dunstonh

Pensions and savings are for two very different things. Savings are best for short term money but typically very poor for long term money. Pensions (assuming you use investments within them) are useless for short term planning (unless you are at retirement) but better suited for long term planning.

So, it really shouldnt be a choice of the two.