To stop pension contributions in favour of stocks?

[croquetas]

I hold a scotish Widows pension (from second job) which I contribute 10% - down from 20%- and I also top up regularly and treat as my personal pension. The plan is to eventually transfer it once I finish with the employer and carry on paying into it. This pension pot is seriously loosing money, more so since the pandemic. I can't bear it anymore and considering opting out.
I have another pension (my main job) with around 9% contributions.

I am considering opting out of scotish widows pension for the next 1- 2 years and put the contributions towards shares & funds.

I'm fully aware I will be missing out on employer and government top ups, but I strongly feel it's the right thing to do.

Anyone in similar position?

That idea makes no sense. What do you think your Scottish Widows pension is invested in? Most likely 60%+ stocks and the remainder funds holding bonds, real estate etc.

You need to check the investment strategy of your SW pension and lifestyling - when the investment strategy changes as you get closer to your assumed retirement age.

Is your employer contributing to your pension?
You get tax relief on pension contributions.

If you have a pension with your main employer, then it probably worth considering transfering your SW pension to your employer's pension. the benefit of keeping it with your employer is that some will top up. Eg You pay 4%, they also pay 4%. Another advantage from paying via your employer is that your pension contributions are not taxed.

If you are not happy with your pension fund's performance - whether it is at SW or with your employer - there are options where you can chose what you want to invest in. However, you really need proper financial advice for this because playing the stock market comes with risk.

You'll be losing out on the tax relief if you stop contributing into your pension and also missing out on employer contributions too.

If you're dead set on opting out of your pension in favour of investments, the best thing would be a Stocks & Shares ISA where you can invest in various securities and all growth and withdrawals are tax exempt.

If you decided against the s&s ISA, be mindful of income tax/capital gains tax when you do eventually come to cash in your investments.

I’m self employed and I split my retirement savings between a pension and a stock’s and shares ISA.
But there’s no way I’d give up the chance to have employers contributions if I had that option!!
So I would keep the pension but put any “top ups” into an ISA instead.

Can you see if you can change the fund(s) that your SW pension is invested in? You are probably in the default fund but there should be a choice.

Your pension is stocks! Plus you get the tax relief.
However if you want your investments to be more flexible, i.e. don't have to wait until a certain age to access them, then stocks could be a good idea as you already have a work pension.
I would advise you stop watching them though! If market dips worry you then investing may not be for you, or do some reading up

Many stocks especially the big ones like BP have fallen - hence funds, pensions values will have fallen. It's too late to move it now imv, the money's been lost. Just keep fingers crossed that it bounces back.

You could put some money into something now, funds (containing stocks) or stock isa. Because they are probably low now after the fall and you might catch the bounce. But it's risky.
Any investment advice I have had says spread the money, so savings in bank, isas (which are tax free), pension, property. Premium Bonds is an option. But nothing is making much money now except tech stocks and they can be volatile.

Find out:
What are the charges on each pension...

What the range of investments are available for each pension...

What (read something like Tim Hayle's "Smarter Investing") you want your money to be invested in ...
(regardless of whether it's in a pension or an Isa or no wrapper at all)

My employer matches contributions up to a point and does it all via salary sacrifice. So I put masses of my salary into my work pension, then every so often I transfer most of that pension into my SIPP, which has much lower charges. In the work pension it's invested in a very low volatility fund as it's not going to be there long. In the SIPP I have the mix of investments I actually want (mainly low cost index tracker ETFs and investment trusts).

Like a lot of people I had 2 or 3 defined contribution work pensions but then sorted things all out about 5 or so years ago. By then I'd built up enough that x% (uncapped) taken out of my holdings every year was enough to make me sit up and see if I could reduce that!

Bear in mind that money goes into your pension tax free and only 3/4 of it gets taxed on the way out. If it's salary sacrifice even better as you don't pay NI on the sacrificed bit.

ISAs you've paid tax on all of the money already before it goes in, but don't pay tax on it when it comes out.

No Isa or pension wrapper at all - you pay tax on all of the money before you got your hands on it to invest it. You get some tax free allowances for dividends and for capital gains but beyond that have to pay tax on income & profit-upon-sale re your investments.

So saving for retirement (assuming you have other savings pots for emergencies / that new car etc) it often makes sense to max out pension contributions first, then (would be nice) anything surplus into an ISA up to (again nice) that limit.

But you can invest in pretty much anything in an ISA or pension wrapper - if not directly then indirectly, through the shares of an investment trust which can.

If your existing pensions don't offer a wide enough range of investments you find a SIP which does.