Pension or ISA?

tigerlily39

:eek: HELP! I dont know what to do. In the past due to peoples experiences around me I am seriously thinking of cashing my pension in & just putting it all in to an ISA or some other investment so I have control over it. Over the past months I have tended to not trust pensions companies & got more frustrated with them. With the current situation today I feel I want to take control myself and I know if you tend to have a certain amount of access to accounts you tend to dip in to them but I have got my finances under control & feel sure that if I invest my pension money already put in to the pot I can do a better job, who knows what the future holds but I don't feel that when it is time for me to retire that I am going to get a good deal.

dunstonh

In the past due to peoples experiences around me I am seriously thinking of cashing my pension in & just putting it all in to an ISA

Two things with that statement.

1 - you cannot do that
2 - there would be no point even if you could. The same investment options exist on ISAs as they do pensions. So you have equal control over where the money is.

Over the past months I have tended to not trust pensions companies & got more frustrated with them.

Well thats just plain silly. Indeed, a number of the insurance companies also own the fund supermarkets and providers for ISAs.

I have got my finances under control & feel sure that if I invest my pension money already put in to the pot I can do a better job

That statement suggests you are not really in a enough control to make investment decisions when you clearly dont understand that the returns have nothing to do with the tax wrapper but the investments you hold inside the tax wrapper. That is nothing to be ashamed of as many inexperienced investors do not. However, it is important to know your limitations and based on your comments you need to know a lot more.

seven-day-weekend

You can't cash your pension in unless you are 55 and then it's only 25%.

tigerlily39

You will have to excuse me but i'm not a money expert but what if I froze my pension & then invested the extra money in to my ISA at least I could see my money increasing & keep a check on it

tigerlily39

You must forgive my ignorance on money matters but I was just asking for some advice, not to be given an answer with a clever attitude, I gather your'e a financial advisor and I have nothing against financial advisors but with your answer it seems like personal sarcasm, I had a good financial advisor up until the start of this year until he sadly passed away so I am feeling vulnerable dealing with new companies & People as he was a personal friend.

seven-day-weekend

tigerlily, I'm sorry if you feel anyone was sarcastic. Please believe that was not intended in my post and I'm sure not in dunstonh's either.

I am not a FA but I personally would chose a pension over an ISA as a pension will pay out forever, whereas the money in an ISAcould either be spent on other things, or run out.

That is just my opinion.

tigerlily39

Thanks for your reply 'Seven-day-weekend' the sarcasm quote was not directed at you but your comments have been helpful

dunstonh

I'm sorry you feel my comments were sarcastic. There was no intention of sarcasm in my post although I do think you are being silly in your views of insurance companies. Plus your posts do highlight your lack of understanding on investments. i.e. stopping a pension and putting it in an ISA to improve returns despite the pension and ISA tax wrappers having near identical investment options. If you put the same investments in both then the returns will be the same.

what if I froze my pension & then invested the extra money in to my ISA at least I could see my money increasing & keep a check on it

You can do that with pensions, ISAs, unit trusts, investment bonds and nearly all tax wrappers nowadays.

The choice of tax wrapper (pension or ISA in this case) should be based on which one meets your needs. As the investment returns will be the same with both we can disregard that. When it comes to income provision, the pension beats the ISA easily. However, the pension is no good at providing capital for retirement (ignoring the 25% TFC as often that is used to boost income or clear debts or make initial purchases). The ISA is better for capital provision. This means in reality the ISA and pension should be used.

Andy_L

tigerlily39 wrote: »

You will have to excuse me but i'm not a money expert but what if I froze my pension & then invested the extra money in to my ISA at least I could see my money increasing & keep a check on it

This is a valid option which may or may not be in your best interests. The pension vs ISA sticky thread above addresses it at some :rolleyes: length.