SIPP/LISA or increase salary sacrifice workplace pension?

joeyboy

Hi folks I'm trying to understand the best option here and it's still not clear to me after reading a few articles online... (me and wife both 31). 

For me personally I am a basic rate taxpayer and already pay in more than my employer matches in my work place scheme. From looking at articles online it seems a lifetime isa is a good option for me to save more for retirement. Then any more can go in a SIPP.

But my wife's companies scheme is salary sacrifice. I am wondering if that means it's better to pay more into that (beyond employers matching %) rather than open a LISA/SIPP? 

Albermarle

A workplace salary sacrifice scheme beats a separate pension, due to the NI savings.

Even for you it might be easier just to add more to your workplace pension, rather than opening a new pension.
You can have different charges and investments choices, but for most people the workplace pension is OK.

The comparison with a LISA has a few pros and cons. If you read the latter part of this article, you will see them explained.
Lifetime ISA (LISA): how they work & best buys - Money Saving Expert

In all cases you should make sure the investments within the pensions ( or LISA) are appropriate for you.

joeyboy

Thanks for the info Albemarle. It is confusing as articles seem to come to different conclusions. For example one I read said for a basic rate tax payer who's already matched their employer the LISA has a small advantage. Though the whole counting as savings in benefits type situations is a negative. 

The main reason I was looking at a LISA or SIPP was to ensure I was comfortable with the investment choices. As I have seen some examples where schemes seem too cautious for peoples age, big % in bonds etc (not great atm..). I think some you can pick but others it's what your employer wants to do..

I have a vanguard S&S isa that I put some inheritance into. 

So I was personally looking at a vanguard SIPP or a moneybox LISA. But I'll review the fine details of my companies scheme first. 

Albermarle

But I'll review the fine details of my companies scheme first. 

Typically a workplace pension has a number of investment options, but >90% never look at them, so the money goes into a default fund and stays there.

There may well be other options in both your workplace pensions, that would be more suitable for your age/risk tolerance etc 

The employer will decide which provider to use and some will have more choices than others. However the employer will have no influence on what you choose from what is available. I think there is one workplace pension provider ( NOW) that has only one choice but that is not normal.