Ideas for good Personal Pension Provider?

Brownie_2

Hi,

I'm 31 and have only just started paying into a pension through my new job. I'm paying the maximum I can into this scheme (to get the highest company contributions), but realising I'm a seriously late starter with pensions I want to invest in another personal pension scheme on top of this. I have £100 a month to invest for the time being and am wondering if anyone can give me a few ideas about who the good providers are and what type of funds I should look at within the wrapper.

Any ideas are gratefully recieved.

Brownie

EdInvestor

If ou are a basic rate taxpayer, you would be better to save the additional money via a stocks and shares ISA than in a pension.

It's sensible to open one through a discount broker which rebates charges such as
https://www.h-l.co.uk

DavidLaGuardia

Ed. You keep on doing this (pedalling opinion as fact)

There are pros and cons to pensions and isas even for basic rate tax payers which have been dicussed at length in this forum asnd you cannot give a one size fits all to everyone.

ISAs benefit from access before retirement, tax free growth for the forseeable future and total flexibilty of how they are used in retirmement.

Pensions benefit from tax relief giving a higher fund at retirement normally even after tax is taken (since 25% is tax free).

Pensions are not accesisble in the mean time (could be a good thing for many in this spend thrift society or even foir senbsible people who may face the emotional dilema of a needy partner or relative) Unlike ISAs they are protected from creditors and inheitance tax.

In return for the tax adantages most of a pension pot (75%) must be used restrictively to generate an income.

In assessing how pensions work for various tax levels, you forget that salary sacrifice can greatly alter the situation in favour of pensions.

To the questioner: For the sake of picking a provider that does both a good pension and entry level personal pension with lots of funds: Scottish Widows are quite good in my oppinion. My advice would be to see an IFA who is preapred to give you an inital meeting free of charge to give you some more insight at this point in time.

EdInvestor

DavidLaGuardia wrote: »

Ed. You keep on doing this (pedalling opinion as fact)

Not just my view - it's a broadly held one, as seen on the

Pensions vs Isas thread


The general theory is

+If free money is on offer from a company pension, then join
+If a higher rate taxpayer, then using a pension to reduce your salary to basic rate may be worth it
+If a basic rate taxpayer with a very small state pension, it may be worth taking out a small personal pension to use up the 10k age tax free allowance

Otherwise an investment ISA would be the wrapper of choice.

It's surprising how many people invest in pensions without knowing that

+the tax relief they receive upfront has to be paid back in retirement
+They can never get their money out of the pension (other than 25% when they retire - the rest of the capital is lost to the insurance company)
+There are strict limits on the amount of income that can be taken out of the pension after they retire

None of these restrictions apply to an investment ISA.

dunstonh

Not just my view - it's a broadly held one, as seen on the

The ISA vs pension thread qualifies the comments with the pros and cons.

A single line of "If ou are a basic rate taxpayer, you would be better to save the additional money via a stocks and shares ISA than in a pension." does not qualify the pros and cons and makes it sound like fact.

+the tax relief they receive upfront has to be paid back in retirement

Wrong.

+They can never get their money out of the pension (other than 25% when they retire - the rest of the capital is lost to the insurance company)

Wrong.

+There are strict limits on the amount of income that can be taken out of the pension after they retire

Not really an issue as the limits are based on what is achieavable on gilts. Rates which are generally on par with savings accounts and sensible to provide a lifetime of guaranateed income.

None of these restrictions apply to an investment ISA.

But then the ISA wouldnt pay as much income as a pension and income is what the pension is for.