Late Pension Boost

stevo88

Hi, I'm 57 and in a fairly well paid job. I will retire at 67. I am in company money purchase pension scheme (MPP) and also pay £200/month into equity ISA (recommended by IFA). I have no mortgage, kids are in good jobs. I was looking at ways of boosting my retirement income and thought of taking out another private pension. Any thoughts on this would be appreciated.

dunstonh

Why another one? Why not just increase the one you are in? Is the ISA wrapper a better option for you? (maybe depending on your circumstances but may not be)

atush

Only open another pension if it is cheaper than your current one, or has more/better investment choices. If you want more retirement funds, just pay in more contributions?

stevo88

Hi, I'm already at max on company plan (5%) . I can pay in AVC's but not sure if its worth it as not matched by employer. I was thinking of increasing monthly payment into equity ISA.

stevo88

I need a 10 year plan to build savings.............Any ideas?

cisamcgu

stevo88 wrote: »

Hi, I'm already at max on company plan (5%) . I can pay in AVC's but not sure if its worth it as not matched by employer. I was thinking of increasing monthly payment into equity ISA.

AVCs will get you a tax break of 20% (maybe 40%)

Aretnap

Normally the only difference between between opening another private pension and making additional contributions to your existing (company) one is that the two pensions may have different fees and different investment choices. This might or might not be a good thing, depending on the fees and investment choices that come with your company pension.

However, if you pay into your company pension via a salary sacrifice arrangement (if you're unsure whether you do check with your HR department if you're unsure) then it gives you extra tax breaks, over and above those which come with a personal pension, and will make paying extra into the company scheme the more attractive option for most people.

If you think you may need to take the money as a large lump sum at some point then an ISA might be the better option, as large one off withdrawals from pensions can attract a high tax bill, but if you're looking to boost your day to day income in retirement then a pension (whether company or private) is likely to be more attractive as it offers better tax breaks than an ISA.