Better return than saving?

Muddymike

I'm a 40% taxpayer planning to retire in about 4 years.
Instead of saving money to an ISA for my remaining working years would I be better off making voluntary contributions to my pension then withdrawing it when I retire?
I have never trusted pension companies with any of my own money in the past, only employers contributions have been made. My uninformed view is that I could pay in before tax, and withdraw it all tax free, providing I add and withdraw no more than 25% of the total value.

greenglide

So your employer scheme is a Defined Benefit scheme and they provide an AVC scheme that allows you to fund a lump sum with the AVCs without reducing the regular pension payments?

If yes then why havent you taken advantage of this before?

If your employer scheme offers a salary sacrifice scheme so that pension payments are both tax and NI free then even better.

What, exactly, is wrong with "pension companies"?

While you are still a higher rate tax payer all contributions to a pension scheme attract 40% tax rebate. The same is not true of ISAs with are funded with money after the 40% tax is paid!

bob_a_builder

General consensus seem to be YES

I asked similar Q a while back - LINK

dunstonh

Instead of saving money to an ISA for my remaining working years would I be better off making voluntary contributions to my pension then withdrawing it when I retire?

Quite possibly. Indeed, quite probable.

I have never trusted pension companies with any of my own money in the past, only employers contributions have been made.

There isnt any real logic in not trusting them. Especially with modern products where the pension provider is no more than an administrator in many cases.

mgdavid

Muddymike wrote: »

I'm a 40% taxpayer planning to retire in about 4 years.
Instead of saving money to an ISA for my remaining working years would I be better off making voluntary contributions to my pension then withdrawing it when I retire?
......

yes - it's a no-brainer.