Pension Options?

TrickyTrotter_2

I'm fortunate to be in a public sector index linked final salary scheme. I am also buying my maximum added years and invest in an in-house AVC run by Scots Widows. All of the above costs me 7.5 % of my salary.

I would like to invest a further £50 or so a month in pension provison but am reluctant to increase the AVCs because they haven't performed that well. (Started in 1999). My earnings exceed the stakeholder limit.

What are my options?

Am I allowed to also invest in a free-standing AVC?
Can I set up a SIPP?
Would I be better investing the money in something else?

Grateful for any comments.

dunstonh

It isnt the AVC that hasnt performed well, its your selection of funds that hasnt. That isnt surprising considering we have had the biggest stock market crash in recent times since 1999.

If you dont want the volatility switch your funds to something less risky and therefore less potential as well.

isasmurf

What are my options?

Am I allowed to also invest in a free-standing AVC?
Can I set up a SIPP?
Would I be better investing the money in something else?

Yes, you are allowed to invest in a FSAVC.
If your earnings are to high to have a Personal Pension (including Stakeholder), you can't have a SIPP. Remember you can also have a Personal/Stakeholder Pension if your earnings were under £30,000 in any year since April 2001.
Have you used your ISA allowance?
How about considering a temporary fix, and investing the xtra £50 a month in a high interest savings account for a couple of years until Pension Tax Simplification comes into effect. From April 2006, the restrictions on investing in Occupational and Personal Pensions will be removed, so you could then transfer the funds in that savings account across to a Personal Pension. You will be able to do this as you are allowed to invest up to 100% of your earnings into a pension in any year (unless you earn over £200,000 and as your in the Public Sector I doubt that )