Private pension options when employer is paying

atush

S&SIsas are what you make them. They are just a wrapper and you choose the investments. Which could be collective investments which are less risky. Global exposure (so you aren't risking all on just the UK economy) bonds etc. They don't have to carry high risk, and cash has risks (substantial ones) all its own.

Cash is subject to inflation risk. Even now, your Cash isa is at best keeping pace with inflation but won't be doing better. So your money isn't really growing, just running in place. Chances are, it is probably falling behind and being eaten away by inflation. Which will bring you to shortfall risk. In that the money won't grow into the size pot you need it to be.

And in any case, what exactly do you think your pension is/will be invested in?

gadgetmind

moneysavinglion wrote: »

Cash ISA. S&S are a minefield (and too high risk for me)

It depends on your timescale. I have done *very* well from S&S ISAs but that's because I invested in a diversified portfolio of equities, bonds and property (that was rebalanced when required) didn't panic during market drops (have seen three huge ones!) and left the money alone for about a quarter of a century.

I have *never* taken money out of ISAs as they are for me another retirement pot, which is I think the best use for them.

However, before considering either S&S ISAs, or a pension for that matter, invest £15 and a few hours in reading "Smarter Investing" by Tim Hale or similar. This will show why low risk gives worse returns over long periods, why you need to diversify, and why you shouldn't panic when values drop.

mark55man

If its just in cash, when you get to 65 - you may have still have the pot, but it won't buy you the same amount of stuff.

interest rates have fallen behind inflation therefore in real terms your pot is shrinking.

This is called inflation risk, and may mean at retirement you don't have enough (shortfall risk)

That said you need to be careful as you start to move across from cash to S&S

MoneyWealthKnowledge

1. Not unless you pay into any other pensions above that of the annual allowance as stated by gadgetmind.
2. I would avoid any pension contracts that are provided by the high street banks. Check out the Money Advice Service, its provided by the government. I can't post links being a new user.

Some Personal pensions are now cheaper than stakeholder pensions, don't pay more than 0.7% for the contract.

some of the funds may cost more depending on what you invest in.

grey_gym_sock

for money intended for retirement, or anything you won't be touching for a long time, the most important thing is to get it invested (with good diversification, so you aren't exposed to more risk than necessary) and keep it invested. it doesn't matter nearly so much whether you do that in an S&S ISA or in a pension.