Retirement planning - Channel Islands

JMP88

Good evening all,

We're looking for some pensions/investment advice - the slight nuance is that I live in Jersey rather than the UK.

The regime in Jersey is broadly the same as the UK with some key differences:

• 20% tax relief on pension contributions (up to £50k p/a)
• 30% tax free sum when drawing the pension, with 20% income tax on the rest
• no lifetime allowance like the UK has (i.e. we are not penalised for having "large" pension pots over £1m)
• no capital gains tax

Myself and my wife are in our mid-to-late 20's, and are very fortunate to both be in highly paid jobs - we currently have a combined disposable income of c. £6,500 per month.

Our current gross pension contributions are £1,500 and £800 per month (excluding tax relief), and the £6,500 figure is after these contributions have been paid. We have c. £100k in those pension pots at the moment.

We've recently purchased a property (using up most of our savings in the process) and have an 80% mortgage - what we are now struggling to decide is, going forward, whether to pay more into our pensions, or to invest in the usual mutual/index funds outside of the pension wrapper. We could also pay down the mortgage, but we have a low (<2%) fixed rate so I don't think that makes sense at the moment.

Paying into the pensions has the obvious benefit of tax relief however, as we are still in our late 20's and a both fair way from retirement, we are a bit worried about locking up too much money in our pensions with no way to access this in the next 30 years.

Investing in the usual index funds/mutual funds would mean that we do not get tax relief, but would be able to access the money before retirement age. Another added complexity is that the typical platforms for doing so (Fidelity, Vanguard, HL etc.) are not available in Jersey, so we would need to figure out how we could do this from here...

Just looking for some opinions as to what you would do if you were in our situation?

Many thanks for any thoughts,

J

Brynsam

Jersey has some excellent financial advisers. In your situation I'd see one of those and get professional advice.

atush

First off more detail.

What % of your salaries are those amounts you mentionned?

In advance of your answer, my advice is:

1 Top up your cash savings to at least 3 months outgoings.

2 Start investing as you say into funds/investment trists and mutual funds

3 Top up your pensions.

2 and 3 could be reversed, or done in tandem depending on your answers.