15k inheritance

LizUK

Hi I have inherited 15k and am unsure what to do with it. A financial advisor suggested I put it in a pension pot to top up my pension and also to start a new pension(I dont have a pension at present but had a good works one before I left my employment 2 years ago) but a friend has said its not worth doing this as pensions are not the way to go anymore as they don't make much money.

I have used up my isa allowance this year. Am really unsure what to do - can anyone advice. I have a mortgage but don't want to pay it off that as not much left to pay. Are pensions not worth investing in anymore?

Many thanks x

noggin1980

ignore your friend, pension is a great place to put it

LizUK

Thanks for that Noggin - would I be best to let an independent Financial adviser sort the pension out? There are some costs involved from her but I wouldn't have a clue what to do etc. Thanks again.

Pincher

£15k ISA allowance next year.

You can always take the money out to attract higher rate tax relief in years where you pay higher rate tax by paying into a pension.

xylophone

How old are you?

Do you have relevant earnings?

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

Do you have a deferred pension with the previous employer? If so, what is Scheme Retirement Age?

What is your position with regard to State Pension?

https://www.gov.uk/state-pension/overview

LizUK

I am 45. I am self employed now earning about 14k currently.

kidmugsy

Have you got a high interest current account such as Santander 123? If not you could keep the money there until the new tax year begins and then put it into an ISA.

Pensions can still be mighty attractive, especially once one is 55 because then you can draw the money out again when you need it. Their attraction is strongest if, absent any employer contribution, you expect to have some future years (after 55) of having less annual income than your personal allowance for income tax. Then you can draw down from your pension fund in such a way as to avoid income tax.

For flexibility perhaps a good plan would be to use ISAs and high interest accounts until you are 55 and then take the money out and contribute to a pension. That would also have the advantage that by then it's conceivable that the tax relief paid to basic rate taxpayers might have been increased.

jimjames

LizUK wrote: »

Hi I have inherited 15k and am unsure what to do with it. A financial advisor suggested I put it in a pension pot to top up my pension and also to start a new pension(I dont have a pension at present but had a good works one before I left my employment 2 years ago) but a friend has said its not worth doing this as pensions are not the way to go anymore as they don't make much money.

I have used up my isa allowance this year. Am really unsure what to do - can anyone advice. I have a mortgage but don't want to pay it off that as not much left to pay. Are pensions not worth investing in anymore?

Many thanks x

Are you using cash or s&s ISAs?

For long term s&s is normally a better option but pension will also invest rather than be held as cash.

atush

Have you got 3-6 months outgoings as cash? Any non mtg debt?

Address these first, then top up your pension (you might be able to use the old one if you like) then open a S&S isa too. Save into both monthly from income too on top.

If you dont know what to invest in, using an online platform such as HL or Cavendish you could choose either a global tracker or a lifestyle find like the vanguard series. I would not use an IFA for an mount 15K or less really due to cost but if you want your old pension taken into acct (how much it is worth?) then it could be worth your while using one.

unbiased.co.uk

PS, you need a better class of friend (or at least more intelligent ones). Now is a great time to invest in pensions.

kidmugsy

atush wrote: »

Now is a great time to invest in pensions.

I doubt it: the OP would give up access to her money for 10 years for only a modest expected advantage, which she could anyway get in 10 years' time without any loss in flexibility.

atush

You doubt if you want to, I wont be.

I already stated the need for cash and other investments as well. No one said to put all cash in a pension.