Pensions...

[Hogan]

Been reading this thread with interest, as I've been doing a lot of research into this recently.

Some information I got in a prospectus from Fidelity showed the difference between investing in an ISA and in a pension. At retirement time, the pension pot was bigger due to the reclaimed tax - but you then have to pay the tax on this when you take it out (and also be more or less forced to take an annuity which may or may not be good value for money).

To cut a long story short, I'm in favour of putting most of my money into an ISA (stocks and shares), and anything over the £7k annual allowance, I'll stick into my SIPP which I recently took out. I feel this gives me more control over my money, as I've paid all my tax on it (in the ISA anyway), and any future grabs by the IR on pensions won't have the same effect.

Just my two pence worth ... I think the main point is to actually do some saving !!

[xoggoth]

You should look at the charges on that old pension, some are very high. May be worth transferring to a modern scheme.

[glashIFA@Paramount]

Been reading this thread with interest, as I've been doing a lot of research into this recently.

Some information I got in a prospectus from Fidelity showed the difference between investing in an ISA and in a pension. At retirement time, the pension pot was bigger due to the reclaimed tax - but you then have to pay the tax on this when you take it out (and also be more or less forced to take an annuity which may or may not be good value for money).

To cut a long story short, I'm in favour of putting most of my money into an ISA (stocks and shares), and anything over the £7k annual allowance, I'll stick into my SIPP which I recently took out. I feel this gives me more control over my money, as I've paid all my tax on it (in the ISA anyway), and any future grabs by the IR on pensions won't have the same effect.

Just my two pence worth ... I think the main point is to actually do some saving !!

Ideal situation is to have a "foot in both camps". The underlying investments are the same as is the tax treatment of the investment. ISA-no tax relief going in, tax free coming out. Pension-tax relief going in, taxed coming out.

The rule changes to psns last April means there is no requirement to take an annuity any more, lots more flexibility now about how you take the benefits from the psn - USP, unsecured pension which is effectively the new name for income drawdown, and ASP, alternatively secured pension from age 75 onwards - gives you control over the level of income you want as opposed to the old traditional lifetime income from an annuity.

[XLMonkey]

I'd take *some* issue with that. for *most* people it is largely deferred taxation.

It does depend on circumstances, I agree. I guess when I say most, I really mean me! I'm assuming that the average contractor is turning over enough to take dividends up to the higher rate threshold, but choosing not to take dividends that slip them over the limit.

That attached link http://boards.fool.co.uk/Message.asp...whole#10360922 is very useful on pensions, as it gives a much longer explanation of the pros and cons of self invested pension vs. ISA for different circumstances.