pension advise

df_97

hi all

i need some advise on my pension options.

i currently have a money purchase scheme with my pervious employer. my current employoer (was suppose to be short term) offers no pension. i have some cash i am willing to invest in a pension but would like to understand what i am doing before i make a decesion.

1. i have not put any more in a pension this tax year.

2. what are my options i can invest in (differnence between ) SIPPS or stakeholder, anything else ? (i have used my ISA alowance)

3. if i dont put money into a pension this tax year can i use my allowances etc next tax year (i am more likely to dump a few k into a pension than sign up for pay monthly approach)

4. currently i pay top tax rate but this due to my large overtime bill rather than my basic salary

any help welcomed

thanks

DF

dunstonh

2. what are my options i can invest in (differnence between ) SIPPS or stakeholder, anything else ? (i have used my ISA alowance)

stakeholder is a generally low cost, limited investment choice wrapper. It has to have a defined charging structure.

personal pensions offer a greater range of investments and can be cheaper or more expensive than a stakeholder as there is no defined charging structure and different pensions will suit different age groups.

SIPPs are experienced investor pensions with almost unlimited investment options and ideally suited for direct investment rather than investment funds. Although it is estimated that over 90% of SIPPs do use investment funds. They are typically the most expensive option but if you know what you are doing they can be the most rewarding.

3. if i dont put money into a pension this tax year can i use my allowances etc next tax year (i am more likely to dump a few k into a pension than sign up for pay monthly approach)

You can put 100% of your income into a pension each year and get tax relief.

4. currently i pay top tax rate but this due to my large overtime bill rather than my basic salary

If that is unlikely to be repeated next year then its best to get it paid in this tax year due to 40% relief. However, you may not get 40% relief on the whole amount depending on how much your contribution is and how much over the 40% band you are. If you are not much over it may be best to straddle it over multiple tax years if you are going to be a higher rate taxpayer each year. If you have childrens/working tax credits, it may alter when its best to pay as well.