Pensions...maybe not for me

kidmugsy

OP: are you a higher rate taxpayer? Do you have an employment pension scheme available?

If the answer to both is "no" it might be wiser to concentrate for now on amassing your cash emergency fund, and investing in an S&S ISA. Then when one or both of your answers becomes "yes" divert money to a pension.

vacheron

kidmugsy wrote: »

OP: are you a higher rate taxpayer? Do you have an employment pension scheme available?

If the answer to both is "no" it might be wiser to concentrate for now on amassing your cash emergency fund, and investing in an S&S ISA. Then when one or both of your answers becomes "yes" divert money to a pension.

These two things can make all the difference.

I am 41, a higher rate taxpayer, and am currently overpaying into my employers salary sacrifice scheme.

I sacrifice £590 of take home pay each month in return for £1470 paid into my pension, that is an immediate gain of 150% before the stock market even begins doing its work!

Where else could I have got that kind of instant return?

kidmugsy

vacheron wrote: »

that is an immediate gain of 150% before the stock market even begins doing its work!

Where else could I have got that kind of instant return?

Investing in pensions is inflexible (unless you are already 55), with much exposure to political risk. Investing in equities is risky. To combine the two is asking for trouble, so you want a compensating incentive. By golly you've got one!

edinburgher

Where else could I have got that kind of instant return?

That is a pretty good deal