Investing or Pension?

ValiantSon

atush wrote: »

Because a pension cant be accessed for many decades. They might want money before that. Upgrading property, marriage, children etc.

I agree the pension is very attractive esp with SS. But they need wiggle room, so some of their extra cash could be put aside outside the pension.

It's very questionable as to whether investments are suitable for those things. Investments are best if they are for a known purpose and therefore structured to meet that purpose with regards to asset allocation and timescale (which should be at least one economic cycle). For the examples you give, cash savings would be most appropriate.

gif1

Thank you everyone. After careful consideration following your posts, I have decided to invest within the pension, contributing personally for 10%(4 + extra 6) of my salary, which will add up to the 12% (8+4) paid by my employer. I guess I will not have the benefits of SS Isa but i will by cashing in a 42% tax relief from day1 and maximizing my employer contributions. The only mental barrier to overcome is that I won't be able to touch the pot for at least 10 years; but with investment, as you teach me, I should be looking at the long term anyway....

enthusiasticsaver

Wise choice

KeepOnKnitting

Alexland wrote: »

I suspect even a 38 year old might be disappointed with the outcome at retirement.

I am 33 and my pension pots are around the mid 40k mark. I have had about 6 years with rubbish income and employer pension contributions, and I was pretty worried until I started my new job.

Good decisions OP on upping your contribution. The more you put in, the more likely there is any point you accessing it before 65 or more.

chucknorris

gif1 wrote: »

Hello,

I am 46

The cons would be that I won't be able to touch this money until, at least, I turn 55. While if I started investing I would not have such restriction,

This doesn't make sense! First of all, your pension would be an investment (not an option to investing). Secondly, you should not invest for less than 9 years anyway, and you will be 55 in only 9 years time. Don't sleepwalk into being poor in your retirement, that would be a long time to endure poverty, instead of being comfortable.

gif1

Hi Chuck Norris, indeed I have decided to invest in the pension.22% of my salary in total.
Something I had forgotten to add is that I am also saving in a saye share save scheme 500£ each month. On maturity -3 years - I just plan to sell the shares should I buy them

MallyGirl

The general wisdom is to not have too many eggs in the same basket - so don't hold investments in your employer. If they go bust you lose both. Just sell them when they mature and invest the money in something else

kidmugsy

gif1 wrote: »

a saye share save scheme 500£ each month. On maturity -3 years - I just plan to sell the shares should I buy them

There is a tax-efficient stunt that lets you transfer them into a SIPP or ISA. Of course, in the SIPP/ISA you'd sell them as MallyGirl says.
https://www.gov.uk/tax-employee-share-schemes/save-as-you-earn-saye

gif1

Thanks Kidmugsy, that's precisely my plan.