Pension contributions

Phanc60844

I'm in a company stakeholder pension with the Peoples Pension.  I have just had a considerable inheritance and I wondering if I should max out my pension contributions to the £60k limit for a few years. I'm 56 and I've got savings so the inheritance can be put away and I'm hopefully looking towards early retirement around 60? Or should I invest the sum and lock it away for about 5 years or so?

dunstonh

I'm in a company stakeholder pension with the Peoples Pension.  I have just had a considerable inheritance and I wondering if I should max out my pension contributions to the £60k limit for a few years.

If you earn at least £60k a year then yes.   If you don't then no

Or should I invest the sum and lock it away for about 5 years or so?

Modern investing is open ended.  no maturity dates.

Marcon

dunstonh said:

I'm in a company stakeholder pension with the Peoples Pension.  I have just had a considerable inheritance and I wondering if I should max out my pension contributions to the £60k limit for a few years.

If you earn at least £60k a year then yes.   If you don't then no

If you've not contributed the maximum during the last 3 years, you may be able to use carry forward (but you can't pay in more than you earn in the tax year in which you make the contribution). https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/carry-forward

Albermarle

Phanc60844 said:

I'm in a company stakeholder pension with the Peoples Pension.  I have just had a considerable inheritance and I wondering if I should max out my pension contributions to the £60k limit for a few years. I'm 56 and I've got savings so the inheritance can be put away and I'm hopefully looking towards early retirement around 60? Or should I invest the sum and lock it away for about 5 years or so?

Normally your money in the Peoples Pension is already invested, so if you add more to it then you will be investing more.
You can see a pension like this as just another way of investing, but with the benefit of tax relief. The downside is that you can not access it until 55, but that is not a problem for you.
Also when you retire normally your pension will remain invested as you drawdown an income from it, so your timescale could be more like 35 years than 5 years.
In this case it is important to be familiar with how your pension is invested. Have you ever looked into that ?
FYI many people on this forum top up their pensions, by using savings either indirectly or directly, in the last few years before retiring.

Steve_666_

At least, increase your pension so that you are no longer paying tax at 40%, free money is the best type of money.

Albermarle

Steve_666_ said:

At least, increase your pension so that you are no longer paying tax at 40%, free money is the best type of money.

The OP has not stated their salary so we are not 100% sure if they are a higher rate taxpayer, or if they earn enough to actually put £60K in their pension.