Pension savings

Legacy_user

Hi- I'm 20 and I've just started a pension with my employer.

This may sound stupid, but would it be financially more beneficial for me to save as little in my employer pension a small possible and put the extra cash I would have saved into a stocks and shares ISA, so that by the time I come to retire I have much more choice with my pension?

Many thanks in advance.

dunstonh

This may sound stupid, but would it be financially more beneficial for me to save as little in my employer pension a small possible and put the extra cash I would have saved into a stocks and shares ISA, so that by the time I come to retire I have much more choice with my pension?

Take the maximum matched contribution from the employer. After that, there isnt a lot of difference.

Once you get to retirement (or later on in life if you move employer) you can move the pension to one that has identical investments to the ISA. However, do note, that the pension may actually be cheaper than the ISA for similar investments.

somethingcorporate

dunstonh wrote: »

Take the maximum matched contribution from the employer. After that, there isnt a lot of difference.

Just worth qualifying that is true if they are a standard rate tax payer. If they are currently a HRT payer (unlikely but not impossible at 20) and expect to be a SR payer in retirement the pension could still be the superior option due to the increased tax saving.

Thrugelmir

dunstonh wrote: »

Take the maximum matched contribution from the employer. After that, there isnt a lot of difference.

When you plan to retire is also a consideration if it's before state retirement age.