Confused with what to do with my money

boingy

Pension = free money.

BMTH

boingy said:

Pension = free money.

How about a stocks and shares ISA?

DiamondLil

BMTH said:

boingy said:

Pension = free money.

How about a stocks and shares ISA?

As someone who never had a workplace pension, I can speak for the advantages of saving into stocks and shares ISAs. After many years of paying monthly into them, I now live comfortably on the state pension and my tax free income from the ISAs.

penners324

Why not put the money your investing in stock & shares (an isa or general?) Into your pension, then invest in the same fund? Vastly more tax efficient.

Start another pot (Monzo or other) to ensure you have a good holiday every now and again.

eskbanker

DiamondLil said:

BMTH said:

boingy said:

Pension = free money.

How about a stocks and shares ISA?

As someone who never had a workplace pension, I can speak for the advantages of saving into stocks and shares ISAs. After many years of paying monthly into them, I now live comfortably on the state pension and my tax free income from the ISAs.

But that doesn't really address the relative merits of ISA versus pension - you could have invested in the same products within a pension and achieved a better net outcome, enabling you to live more comfortably!

Eco_Miser

If you intend retiring at 55, you need to invest in an S&S ISA, as well a a pension, because you won't be able to draw your pension until you are at least 57, possibly more by the time you get there. Currently pension gains 6.25% over ISA, because of the 25% tax-free lump sum, but that can change.

kempiejon

If you have several £10ks of shares in the same company you work for you have a lot of risk in that company. Your employer is also your investment. Diversify. History has lessons of loyal employees who had a lot of their wealth tied into their company then the share price collapsed and they lost their jobs too.
I would thank the company very much for the chance to participate in the share save scheme and cash it in as soon as possible while continuing rolling invest and encashment for as long as the deal looks good and you can afford it. Is there an incentive for tax or employee discount?
If you cash in you could redirect into a globally diversified equity of some sort. Do you know how well your investment in the employer company has performed? Can you compare it to some sort of global equity?

eskbanker

Eco_Miser said:

If you intend retiring at 55, you need to invest in an S&S ISA, as well a a pension, because you won't be able to draw your pension until you are at least 57, possibly more by the time you get there. Currently pension gains 6.25% over ISA, because of the 25% tax-free lump sum, but that can change.

Yes, it's undoubtedly true that the rules can change, for ISAs as well as pensions of course!  And yes, age restrictions for pension access should be part of the evaluation, as should the potential for pension drawdown in between retirement and state pension age to use up the whole personal allowance, widening that gap from 6.25% to 25% for £16,760 annually (based on current rules and allowances).

BMTH

penners324 said:

Why not put the money your investing in stock & shares (an isa or general?) Into your pension, then invest in the same fund? Vastly more tax efficient.

Start another pot (Monzo or other) to ensure you have a good holiday every now and again.

I won't get access to the pension pot until 58 (probably longer). The S&S Isa gives me an opportunity to go a bit sooner

kempiejon

BMTH said:

penners324 said:

Why not put the money your investing in stock & shares (an isa or general?) Into your pension, then invest in the same fund? Vastly more tax efficient.

Start another pot (Monzo or other) to ensure you have a good holiday every now and again.

I won't get access to the pension pot until 58 (probably longer). The S&S Isa gives me an opportunity to go a bit sooner

Good thought. Although the pension looks slightly more profitable with the tax reclaims and 25% tax free in drawdown it is locked up and somewhat at the whim of government. ISAs do not totally escape that threat but access is much easier. My investing journey started quite some time ago and in those days I didn't add any extra to my company contributions as ISAs and general accounts were good enough and better suited my plan for pre 55 retirement.