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grumiofoundation

As a teacher there is the option to buy additional pension as well as/instead of investing. 

https://www.teacherspensions.co.uk/members/working-life/paying-in/increasing-your-pension/additional-pension.aspx
https://www.teacherspensions.co.uk/-/media/documents/member/factsheets/managing-your-pension/additional-pension-factsheet.ashx?rev=f76a6a51a67c486c92f9c05bb8d61753&hash=C8DCB15675C913FB9B1F6BBDA1C75DD3

Albermarle

Often the answer to this question is so a bit of both, so you are probably on the right lines.

Normally it is better to invest via a pension , especially if you do not need the money for another 10 years or so .
So this means via a separate Defined Contribution pension, which is different to your Teachers Pension.
You get tax relief on the way in and pay ( less) tax on the way out .
You pick the investments you want to hold within the pension . Some simple pensions make this process easy by offering very few options . Others offer more choice if needed.

In case you are not familiar with this are you can have a look at these links .

Pensions and retirement | Help with pensions and retirement | MoneyHelper

Pensions: Everything you need to know for retirement - MSE (moneysavingexpert.com)

DrPips

grumiofoundation said:

As a teacher there is the option to buy additional pension as well as/instead of investing. 

https://www.teacherspensions.co.uk/members/working-life/paying-in/increasing-your-pension/additional-pension.aspx
https://www.teacherspensions.co.uk/-/media/documents/member/factsheets/managing-your-pension/additional-pension-factsheet.ashx?rev=f76a6a51a67c486c92f9c05bb8d61753&hash=C8DCB15675C913FB9B1F6BBDA1C75DD3

Thanks for those links. Even for the smallest level of increase (£250) I’d need a lump sum of £3300 and I wouldn’t be able to take this until I was 60. I want to cover the gap from 55-60 so I don’t take as much of a hit on my pension. 

DrPips

Albermarle said:

Often the answer to this question is so a bit of both, so you are probably on the right lines.

Normally it is better to invest via a pension , especially if you do not need the money for another 10 years or so .
So this means via a separate Defined Contribution pension, which is different to your Teachers Pension.
You get tax relief on the way in and pay ( less) tax on the way out .
You pick the investments you want to hold within the pension . Some simple pensions make this process easy by offering very few options . Others offer more choice if needed.

In case you are not familiar with this are you can have a look at these links .

Pensions and retirement | Help with pensions and retirement | MoneyHelper

Pensions: Everything you need to know for retirement - MSE (moneysavingexpert.com)

Thanks for that. I know this is an impossible question to answer, but does that fact I’d want to start drawing on this investment from about 55 rather than normal pension age mean it would still be better than say a stocks and shares ISA or a Lifetime ISA? I’ve not heard much about the latter recently, have they fallen by the wayside?

DrPips

DrPips said:

Albermarle said:

Often the answer to this question is so a bit of both, so you are probably on the right lines.

Normally it is better to invest via a pension , especially if you do not need the money for another 10 years or so .
So this means via a separate Defined Contribution pension, which is different to your Teachers Pension.
You get tax relief on the way in and pay ( less) tax on the way out .
You pick the investments you want to hold within the pension . Some simple pensions make this process easy by offering very few options . Others offer more choice if needed.

In case you are not familiar with this are you can have a look at these links .

Pensions and retirement | Help with pensions and retirement | MoneyHelper

Pensions: Everything you need to know for retirement - MSE (moneysavingexpert.com)

Thanks for that. I know this is an impossible question to answer, but does that fact I’d want to start drawing on this investment from about 55 rather than normal pension age mean it would still be better than say a stocks and shares ISA or a Lifetime ISA? I’ve not heard much about the latter recently, have they fallen by the wayside?

Ahh, can’t draw on a LISA until 60 so that’s out anyway.

Albermarle

DrPips said:

Albermarle said:

Often the answer to this question is so a bit of both, so you are probably on the right lines.

Normally it is better to invest via a pension , especially if you do not need the money for another 10 years or so .
So this means via a separate Defined Contribution pension, which is different to your Teachers Pension.
You get tax relief on the way in and pay ( less) tax on the way out .
You pick the investments you want to hold within the pension . Some simple pensions make this process easy by offering very few options . Others offer more choice if needed.

In case you are not familiar with this are you can have a look at these links .

Pensions and retirement | Help with pensions and retirement | MoneyHelper

Pensions: Everything you need to know for retirement - MSE (moneysavingexpert.com)

Thanks for that. I know this is an impossible question to answer, but does that fact I’d want to start drawing on this investment from about 55 rather than normal pension age mean it would still be better than say a stocks and shares ISA or a Lifetime ISA? I’ve not heard much about the latter recently, have they fallen by the wayside?

Currently you can start drawing from a DC pension at age 55 , although this is set to increase to 57 soon. It seems like if you started a pension now , you could still access it at 55, although the legislation involved is not yet fully detailed on this point as far as I know .
A S&S ISA gives more flexibility BUT
You will lose out on at least 6.25% tax benefit with the pension ( can be more )
All investments should be a long term project ( I am not sure you mentioned your current age compared to when you might start taking money at 55) 

 Even for the smallest level of increase (£250) I’d need a lump sum of £3300 and I wouldn’t be able to take this until I was 60.
Apart from the age restriction , this is good value for money . 

Also if you retire early you need to make sure you will get a full state pension. Even if you have to buy extra NI years as this really is excellent value for money. 

DrPips

I’m currently 39. I started work at 21 (I think, part time work before that so not sure if I made NI contributions, but not far off 35 years). 

Yeh, the increase in age from 55-57 needs to be clarified to help me out. Whether that only apple to new SIPPs or existing ones too. 

I’m looking at Hargreaves Lansdown as a platform. They do SIPPs and ISAs. Seem to get good reviews and have relatively low % fees rather than flat rates.

DrPips

Thanks again for your help and advice

DrPips

Another question, am incorrect in thinking that the recent changes to pensions mean I can have access to all of my pension fund when I choose to? As I only want this to fund me between 55 and 60 when I’ll take my teacher’s pension? Or are there still limits on how much I can take out?

Albermarle

DrPips said:

I’m currently 39. I started work at 21 (I think, part time work before that so not sure if I made NI contributions, but not far off 35 years). 

Yeh, the increase in age from 55-57 needs to be clarified to help me out. Whether that only apple to new SIPPs or existing ones too. 

I’m looking at Hargreaves Lansdown as a platform. They do SIPPs and ISAs. Seem to get good reviews and have relatively low % fees rather than flat rates.

% charging platforms are better for smaller amounts , say less than £100K. However Fidelity, AJ Bell and Vanguard have a lower % charge than HL . All three have a good reputation. 

More importantly with all platforms, the costs of the investment funds you choose can have a much bigger effect than any small differences in platform charges . 

You should aim for funds that only cost around 0.2% to 0.3 % , which usually means a low cost multi asset fund . Such as 

Fund-of-funds: the rivals - Monevator