Pension money

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
2 replies 717 views
pardal51pardal51 Forumite
427 Posts
Hi all,

Need a bit of advice from the experts....

Have recently changed job and the pension scheme is awful. Basically the company pays only 1% into the pot topped at £50 (nothing really).

BR payer, 42 planning to retire at 67.

My question is:

I am 100% offsetting my mortgage (using savings) and want to find out whether it is better to start saving + drip feed from offset into a S&S ISA or to put into the pension scheme pot?

Comments and suggestions are much appreciated.


  • Drp8713Drp8713 Forumite
    898 Posts
    Eighth Anniversary 500 Posts
    £50 a month for 25 years with average investment growth and charges would be around £17000 for free.

    Why not pay just enough to get the employer contribution then put the rest into a S&S ISA?
  • edited 31 December 2014 at 2:59PM
    jamesdjamesd Forumite
    24.9K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    edited 31 December 2014 at 2:59PM
    The company payment beats nothing so it's best to at least get their maximum. The £50 fixed maximum will be illegal once the company reaches its staging date for auto-enrolment because that sets the legal minimum as a percentage of eligible pay.

    Investing in a S&S ISA is a good option for the rest, particularly given current uncertainty about whether basic rate pension tax relief might go up after the next general election. ISA gets you the gains now and the flexibility to use a pension later if it does become more beneficial.

    The long term historic growth of the UK stock market has averaged a little over 5% plus inflation for the last hundred plus years. That usually beats mortgage interest rates, making investing a better deal long term. Offset capability is handy for emergency funds, currently uninvested money, diversification and as an option for protection from possibly high tracker rates in the future.
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