AVC or stakeholder?

donmaico

My wife, who is in a superannuation scheme,was wondering whether to renew her AVC contributions she took out with the Pru or take out a stakeholder pension or , opt for another share ISA instead. Like so many she lost total confidence in pensions because of poor annual returns so stopped paying into her scheme but wonders whether she should step back in. Any advice please?

dunstonh

Like so many she lost total confidence in pensions because of poor annual returns

Pensions dont make or lose money. They are just a tax wrapper that contain investments. It's the investments that perform (or not). There are tens of thousands of investment options.

Her options are:
1 - Added years (if still available)
2 - AVC
3 - stakeholder pension, personal pension or SIPP
4 - ISA

each has its pros and cons. Added years can appear expensive but will almost certainly provide the highest income. AVCs are bettered by personal pensions from investment point of view but some AVCs can enhance the lump sum benefit. Stakeholders are a basic option with limited investment options. Personal pensions and SIPPs increase the investment options. ISAs (stocks and shares) dont get tax relief but dont pay tax at the other end. The flexibility of ISAs can beat the others in many respects depending on the income your wife's pension is targetted to pay.

donmaico

1) she discounted it as it was far too expensive for the returns.
2) she might consider . She also has a frozen pension from a previous job which could be added to the pot at the end.
3) from what you are saying not a good option.
4)She already has a share ISa and I feel this the route she most likley wants to enhance/continue. She has Skandia multifund so adding to it would be simple