Pension pot or Bond for my £40,000 ?

cslogg

Looking for help on this please.
I am a 62 year old male that has been in my company pension for around 4 years via a salary sacrifice method.There is not a lot in the pot as I am on £21k a year. I have £40k that I need to find a home for.I have maxed out my Isa limit for this year and have some NS&I certificates which I cannot add to.There is a 5 year bond that pays 3% interest but am wondering if I would get better value if I put the money into my pension pot.The pension is run by Scottish Widows for my company.Just to complicate things further I was told on Monday that I am being made redundant next mont so I will no longer get contributions from the company into the pension.

Thanks
cslogg

atush

Possibly the pension, but when will you retire (and how ling will it have to grow?)

By using your Isa allowances, do you use your full S&S isas as well as Cash Isas? If you already have some cash ISAs set aside, then a S&S isa will be a good home for some of that pot.

cslogg

I have never been a fan of S&S isas and am not going to change now.
Thanks anyway

cslogg

atush

Too bad, as cash is losing ground to inflation daily.

In any case, pensions and S&S isas basically are just tax wrappers and can hold the same investments.

dunstonh

I have never been a fan of S&S isas and am not going to change now.

S&S ISAs can hold around 50,000 investments and an unlimited variation. So, by saying you are not a fan of them you are effectively saying you that you dont want to invest and are willing to stick with inflation risk and shortfall risk.

It seems strange to consider pension and not ISA when both can hold the same investments and the only difference is tax and maturity process.

cslogg

It's probably that I have no idea how or who to invest my Isa. cash with and the more I read about it the more it puts me off as I am fearful of making a huge mistake with my money.I have already lost money on my Endowment mortgage and Unit Trust investments over the years. Then I read about managment fees etc. and it puts me off even more

cslogg

atush

Well, stick around here and read up and learn. No one is saying to put all your cash into equities, but they do outperform cash over longer periods (and this past year for me- have done many times better than cash).

Stick with collective investments such as funds/investment trusts and look to keep charges low using trackers or lifestyling funds.

if you put just a quarter of your pot into a S&S isa this year (or half that if you have used your Cash ISA allowance) that will be a start to beating inflation and getting some growth.

What are your pensions invested in? Are you happy with them?

Cygnus_Alpha

cslogg wrote: »

Looking for help on this please.
I am a 62 year old male that has been in my company pension for around 4 years via a salary sacrifice method.There is not a lot in the pot as I am on £21k a year. I have £40k that I need to find a home for.I have maxed out my Isa limit for this year and have some NS&I certificates which I cannot add to.There is a 5 year bond that pays 3% interest but am wondering if I would get better value if I put the money into my pension pot.The pension is run by Scottish Widows for my company.Just to complicate things further I was told on Monday that I am being made redundant next mont so I will no longer get contributions from the company into the pension.

Thanks
cslogg

The only reason to plump for the pension is for the tax relief.

The 5 year bond is not a bad idea but you are tying up your money at a low rate.

If you are being made redundant then presumably you will get some redundancy pay too? So perhaps wait for things to settle down and take stock first.

cslogg

The redundancy will only about six weeks pay.
I have been taking out ISAs for the past 6-7 years and always cash,so am only using half my entitlement. I have been looking at the recommended brokers on this site and and if I am being honest I need to use my money to buy an isa that the broker will manage and hopefully give me good return.I cannot manage one myself as I have no idea about shares.Is this possible ?

cslogg

atush

yes, but the brokers listed here are execution only and dont provide advice.

So unless you want to pay an IFA, do some reading. Maybe start with the Vantage thread?

And you could pay some into your pension too if you like.

https://forums.moneysavingexpert.com/discussion/4392271

Cygnus_Alpha

cslogg wrote: »

The redundancy will only about six weeks pay.
I have been taking out ISAs for the past 6-7 years and always cash,so am only using half my entitlement. I have been looking at the recommended brokers on this site and and if I am being honest I need to use my money to buy an isa that the broker will manage and hopefully give me good return.I cannot manage one myself as I have no idea about shares.Is this possible ?

cslogg

With the amounts we are talking about for ISAs, the options for a S&S ISA are either to buy funds which are put together by fund managers or self select your own shares. A 'broker' isn't going to be interested or be cost effective for S&S ISA of just over £11k.

You could do a tracker fund which tracks say the FTSE 100.