Is another pension the answer ?

roswell

Hi,

Not sure how to word this so ill work on facts,

Current age 26 (nearly 27)

I have a company pension last valuation was last june,

£11,000 value,
Currently pay £ 85ish in each month match by employer they only match a maximum of 6%.(currently pay max)
Retirment due 2048 I think the projected income then is £7500 value £330,000

over the years the pension scheme has changed alot but recently the 14 funds that were available have been removed and replaced with 8 new funds.

Previousely there was funds from Fidelity(9 funds consiting of mixes of equities or specifics eg europe / america / emerging markets / japan / south asia / UK ) , Pru with profits and a seperate cash fund.

These have now been replaced with.
1X World equities (actively managed)
1x Uk equities (based on ftse 100)
1 X Bonds / equity global (20% / 80%)
1 X Bond / UK Equity (30% / 70 %)
1x bond and gilts mix (20 / 80%)
1 X Gilts
1X Bonds
1X cash

previusely I was 20% in each of the specific fidelity funds eg 20% europe 20% emerging markets etc all except Uk which i stayed out of.

I have now chosen 100% World Equities as it is the ONLY actively managed fund and the only one I feel is worth the long term risk.

I have recently been thinking about opening a stake holder pension to give me some freedom to allow me to invest in other funds that arent available through my company scheme any more, Im looking to put in £50 a month which isnt much but I can problably kick start it with a £4000 lump sum then pay £50 a month and review anualy,

What sort of retirement income could I create based on that contribution ?
Could i use my £4000 in a better way ? eg would a mini S&S Isa be a better option and start a stake holder with £50 a month ?

I currently hold cash and a few shares in a share builder account (found out im not cut out for single company investment so S&S isa would be used for fund investment)

any advice / suggestions / combinations welcome.

Thanks

dunstonh

Company schemes rarely have a decent fund range. So you have to compromise the fact that you get free money in one hand and limited investment choice on the other. You would always maximise to get the free money.

I have recently been thinking about opening a stake holder pension to give me some freedom to allow me to invest in other funds that arent available through my company scheme any more, Im looking to put in £50 a month which isnt much but I can problably kick start it with a £4000 lump sum then pay £50 a month and review anualy,

If the occ scheme fund range isnt great and you are going above the free money mark then using a stocks and shares ISA, SIPP or personal pension would be common sense. However, using a stakeholder pension would not be. A stakeholder pension would typically offer the same funds you have on the occ scheme and your reason is to pick something different.

You need to decide where you want to invest. Do you want a higher risk, lower risk or just some variety that you cannot get.

I suggest you read the ISAs vs pensions thread stickied at the top of this board. There are pros and cons to each and there is no one answer as it depends on circumstances. For example, are you married? Does your wife have a pension? If not, then she should get the money to put into hers so you use both your tax free allowance. £20,000 between a couple (10k) each would be tax free. £20k all in your name would see you pay over £1000 a year in tax. All because you got the direct debit wrong by putting it all in your name. That is just one example but the thread mentioned covers others.