ISAs as retirement fund advice please

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conradmum
conradmum Posts: 5,018 Forumite
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in Pensions, annuities & retirement planning
I'm in the Teacher's Pension fund but only work part time, so, good though this is, I don't think I'll build up enough years to give me the income in retirement that I'd like.
I'm 41 and at the moment I'm putting £1200 a year into a mini cash ISA. This is the kids' university fund so HAS to be completely safe.
I'm thinking of putting away another £100 a month into a stocks and shares ISA as an investment for my retirement but I've never done this kind of thing before. Could anyone give me some general pointers on what I should be looking for?

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  • Andy_L
    Andy_L Posts: 12,791 Forumite
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    Buying extra years in the teachers pension scheme is an option &, unlike an equity ISA, is (effectively) risk free

    http://www.teacherspensions.co.uk/
  • Sobraon
    Sobraon Posts: 325 Forumite
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    But don't take to long to think about as it looks like the ability to elect to buy "past added years" will be withdrawn Jan 07.

    See http://www.teacherspensions.co.uk/tpnews/Tax_Simplification.htm

    I believe you can change your mind (stop paying) after making a 'method A' election so it might be worthwhile reserving your position.
  • dunstonh
    dunstonh Posts: 116,371 Forumite
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    Buying of added years can seem like the most expensive option when looked at initially but it usually ends up being the best option when you actually look at ALL of the benefits it brings.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • conradmum
    conradmum Posts: 5,018 Forumite
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    Admittedly I've been very impressed with the pension so far. I seem to have already accrued around a £1000 annuity for roughly £3500 in contributions. But on the other hand the advice always seems to be to spread the risk. Surely buying extra years is putting all my eggs in one basket?
    Who's to say in future years the Government won't renege on its pension promise?
  • Andy_L
    Andy_L Posts: 12,791 Forumite
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    The teachers pension scheme is unfunded, you don't get an annuity. You pension is paid out of the contributions of members & tax income.

    IMO the government is not going to renage on pension promises for past service as this will
    a) destroy it's credibility for long-term financial agrements, with adverse effects on things like gilts & PFIs
    b) destroy it's credibility as an employer

    Future pensions are of course a different matter
  • conradmum
    conradmum Posts: 5,018 Forumite
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    Yes, sorry, I realise I'm using the wrong term. What I meant was the income per year post retirement. I'm already aware of the source of the payments - that my contributions and taxes are paying the current retirees. This is what makes me feel my pension isn't secure, as it depends on there being sufficient contributors & tax payers around in 20 odd years' time for my pension to be paid. With current demographic trends this seems unlikely.
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