AVC to pension or ISA??

JoeyS

Hi guys,

Just seeking some advice regarding pension savings. I currently pay in to an emergency service pension, I’m 26 and have been doing so for the past 3 years.

I have an option to pay extra in to my pension, which is called AVC, Additional Voluntary Contributions. I do not believe my employer contributes further if I did this but it would be taken from my pay before tax.
The other option i was thinking about would be a Lifetime ISA or some sort of similar with the banks?

Any advice on where to put a little bit of extra money each month towards retirement would be great thank you. For the time being, I’m only looking to put say an extra £50 a month away but hoping this will increase with time.
I’m looking for a balance between security in where my money goes and investment.

Thanks again

dunstonh

There are also SIPPs, stakeholder pensions and personal pensions as well as a stocks & shares ISA as viable options.

The other option i was thinking about would be a Lifetime ISA or some sort of similar with the banks?

General rule of thumb is to only use banks for banking products. Do not use them for financial products. They tend to be expensive and/or poor quality.

I’m looking for a balance between security in where my money goes and investment.

What does that actually mean? Some context is needed as that can mean different things to different people

atush

Given your young age, I would think a S&S isa would be a good idea. But given the SS (ie you get your NI back so 32% tax relief) that pulls hard too.

A S&S isa would give you investments you could draw from to finance a house,car, marriage, kids- whatever life throws at you. but a DC pension alongside your DB one would give you the ability to retire early before your scheme age.

So I would consider splitting your extra cash between the 2. That is, if you already have a cash emergency sum set aside of 3 months outgoings or more.

AlanP_2

I don't know for sure but I would be suprised if Salary Sacrifice was on offer, and OP hasn't mentioned it.

If it isn't then it would tax saving only.

atush

I do not believe my employer contributes further if I did this but it would be taken from my pay before tax.

This made me think it might be SS