S&s isa or private pension?

kezzygirl

Unfortunately my husband was made redundant at start of april- he volunteered as he had secured another job, which thankfully will start Monday. He has a pension with legal and general from his previous employer. He was paying in to the share save scheme although currently the shares are worth less than what he has put in. He has withdrawn his savings from the scheme (£4300). My question is, shall we set up a private pension with say aviva, or put the money in a stocks and shares isa? He is 53 and I am 41 next month, I am taken care of with my nhs pension when the time comes, but he just has his legal and general which has about 15/16k in currently.

Brie

Does the new job have a decent pension scheme? Obviously he should join whatever they have going as he needs to build that pension pot. Would the new scheme take the £4300? Might be easier than having that as a separate pot unless he plans to pay in to that as well as the employer's scheme.

And is there any debts that might be helped by a donation?? If you have a mortgage can you overpay on that - it might be a worthwhile saving on interest you would otherwise need to pay. Any credit cards not cleared every month, lingering overdraft or car loan??

Marcon

What are your objectives/priorities? Would these be better served by an ISA or adding the cash to a pension?

Albermarle

His new employer has to offer a pension scheme and they have to pay into it. So he should join that and then look at maybe transferring the L& G one into that once he is sure he is happy with the new job.

A hard question maybe, but how has he got to the age of 53 and have only £15K in a pension? It is a tiny amount in pension terms.

kezzygirl

https://forums.moneysavingexpert.com/discussion/comment/82014806#Comment_82014806

He has only ever had the government pension nest when it was implemented and then joined his most recent employer and they used legal and general. We moved over the nest to l&g and I've just checked and he has just over 17k which he can withdraw at 65. He doesn't have a profession, was in care work and stayed at home with the kids for a couple of years while I built my career.

kezzygirl

https://forums.moneysavingexpert.com/discussion/comment/82014806#Comment_82014806

NNot Sure what their pension scheme offer is, but the private pension/s&s isa would be in addition to his contributions

kezzygirl

We do have a mortgage, quite a large one of 194k with 18yr left. We have about 18k credit card debt interest free, all coming to an end at various points over the next year. Was thinking of paying off the 2.4k due in December, but wanted to perhaps just forget about the sharesave money and shove it away for his retirement.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82014874#Comment_82014874

Well you don't need us to tell you that if the interest on the credit card goes up to 20% or so then it would be a good idea to pay off the credit card debt. The question is would you need the sharesave money to do that? Or are there other funds available. Putting the sharesave money in a pension would protect it from being used to pay off the credit card because he could not get it back until he is 57. But if you would need it then better to put it in an ISA - and if you are going to need it in the next year then preferably in a cash ISA not stocks and shares

kezzygirl

https://forums.moneysavingexpert.com/discussion/comment/82014934#Comment_82014934

We would likely transfer the credit card again interest free. But no fee is usually only for a year at the moment.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82014940#Comment_82014940

If that works then great. I was just thinking it is perhaps a thing to consider in the ISA vs pension decision - being able to get at the money. You might regret locking the money away (or perhaps be glad you had so you couldn't be tempted to spend it).

LHW99

The plus side of putting it in a pension is the additional Government tax top-up.

The downside is time till access, as said above.

Depending on what his new scheme is, he is not restricted to only adding the autoenrollment minimum, he could ask to add more (some employers will also add more to a pension if the employee increases their contribution).