\\\Pensions advice please

purediamond

I am a 49yr old higher rate taxpayer working in the construction industry and therefore tend to move company every few years. My current company does not have a group pension scheme and for the first time I have to consider making my own investment.

I have accrued about £120,000 in previous schemes (some have protected rights:some don't) which are now paid up. I would like to invest £855 per month and have been told by a friend that a SIPP with Hargreaves Lansdowne is my best option.

I'm a complete novice as far as shares are concerned but I understand that HL have a managed fund which might be suitable.

Other factors I'm considering are

1) My wife is five years older than me, does not work, has no occupational pension and, because she paid married woman's NI contribution will not receive a full state pension. I'm therefore investing to cover the cost of retirement for both of us.

2)I've been told that I may be better off investing in ISAs.

3) Should I leave funds in my paid up schemes or transfer them to my new scheme. I realise that protected rights cannot be transferred into a SIPP at the moment but that this is likely to change in the forseeable future.

I'd be really grateful for any comments.

dunstonh

I'm a complete novice as far as shares are concerned but I understand that HL have a managed fund which might be suitable.

That one sentance alone suggests that a SIPP would be inappropriate for you. SIPPs are the most expensive option for buying funds. An experienced investor or one using an investment IFA will utilise a spread of funds/investments and build a portfolio to a certain strategy. That makes the extra costs worthwhile. If you are going to stick it in a bog standard managed fund, particulary the HL ones which arent known for good performance, then you may as well go with a stakeholder pension and pick one of the insurance company balanced managed funds.

1) My wife is five years older than me, does not work, has no occupational pension and, because she paid married woman's NI contribution will not receive a full state pension. I'm therefore investing to cover the cost of retirement for both of us.

You should consider making pension contributions in her name. If its all in your name, you will end up paying nearly £2000 a year more in tax than if it was split between you. Your wife will be able to earn nearly 10k a year tax free. If that 10k income isnt used and its all in your name, the 20% tax bill is £2000.

2)I've been told that I may be better off investing in ISAs.

ISAs have exactly the same investment options and charges as pensions. The only difference is how benefits/income are paid. So usually this means doing a combination of ISAs and pensions to get the best from both.

3) Should I leave funds in my paid up schemes or transfer them to my new scheme.

Depends on whether they are any good or not.

I realise that protected rights cannot be transferred into a SIPP at the moment but that this is likely to change in the forseeable future.

Hybrid SIPPs, fund supermarket pensions and personal pensions can take protected rights. This "likely change" to allow it in SIPPs has been coming for about 3 years now and still hasnt arrived. There is nothing yet published from the Govt that says it will allow it. It probably will at some point but when is not known.