Pension or stocks and dearest isa

daniel05

Hi, I'm looking for some guidance please. I haven't got much  of a pension  but am now in a position  to  invest £100 a month somewhere.. I only have 17 years until I retire so not sure if it is worth increasing my pension or whether I should invest in a stocks and shares fund. I know there are quite a few variables  to consider  but just wondered  if there is anyone that can offer advice.  what would be better to invest in over a 17 year period. I'm prepared to invest with a bit of risk but not the very high risk  funds.

ColdIron

Do you have a pension with your employer? For many this is the most practical route due to employer contributions, tax relief etc

MX5huggy

ISA or Pension is just a wrapper for investments. You can hold exactly the same investment (fund) in either. 

A pension is the best wrapper to save for your retirement, then you need to decide what investments to hold in your pension. 

Going back a stage what’s your work place pension? Can you get any more from your employer by contributing more? Is it a Salary Sacrifice pension? What’s your current income approximately? 

daniel05

Hi, yes. They pay in the minimum  legal requirement. Is a pension over 17 years going to give a good return?ColdIron said:

Do you have a pension with your employer? For many this is the most practical route due to employer contributions, tax relief etc

daniel05

My employer  puts in 1% I think

ColdIron

The minimum employer contribution is 3%. As I say a workplace pension is the best route for most so in your shoes I would increase my pension contribution

https://www.gov.uk/workplace-pensions/what-you-your-employer-and-the-government-pay

MX5huggy

But the first £520 a month can be disregarded so it can be less than 3% of total salary. 

P1Fanatic

You say you expect to retire in 17 years - is that at State Pension age? You should also check your National Insurance Contribution history to ensure you are on track to get the maximum pension rate possible. You can do this via HMRC / Government Gateway. If you have any gaps in last 6 years you maybe eligible to make a voluntary payment to fill those gaps.

dunstonh

. I only have 17 years until I retire so not sure if it is worth increasing my pension or whether I should invest in a stocks and shares fund.

You have basically said should you buy a car or should you buy petrol.

You can buy a stocks and shares fund in a pension but you cannot buy a pension in a stocks and shares fund.

I know there are quite a few variables  to consider  but just wondered  if there is anyone that can offer advice. 

Any local IFA can.   

what would be better to invest in over a 17 year period. I'm prepared to invest with a bit of risk but not the very high risk  funds.

Pension would almost certainly be the best option (but insufficient information to say that is correct 100% of the time).   

They pay in the minimum  legal requirement. Is a pension over 17 years going to give a good return?

It will give an identical return whether you hold the same fund in an ISA or unwrapped.   The only differences are the tax handling and pensions beat ISA which beat unwrapped.

(unwrapped is where you hold investments outside of a tax wrapper.  i.e. not in an ISA, pension or bond or other tax wrapper)