Small amount extra every month, where would you put it?

[Savesavesave]

I'm trying to build up more savings and income for retirement as my pension is pretty small due to not working during my 20s.

I'm 42 and am putting additional money aside each month into a workplace pension (making additional contributions on top of the standard, the fees are very low but I don't choose my own investments), stocks and shares ISA (only about £1,500 in that currently as I don't really understand investing so not wanted to risk too much) and cash savings.

Approximately £150-200 going into each of these each month but I should be able to increase what I'm saving by about £100-150 each month.

Would you put the extra in the pension, the S&S ISA or cash?

Do you have a mortgage? Would you consider overpaying to give you more options as you approach retirement?

Have a look at the Flowchart for savings and investments, I can not make links work, and see how your savings stack up against that.

You need instant access to rainy day savings, savings for a new car, new roof new boiler, and six months living expenses.

Then pensions and investments. It's a really good flow chart

On the basis of what you've said I'd say stocks & shares ISA. More flexible & can get hold if the money quickly. You cant access the money in your pension until you at least 57......maybe later if Labour change the rules.

Obvously if you have a mortgage with an interest rate of 2.5% or above then you might want to look at overpayments.

And for your information....your pension is invested just like a stocks & shares ISA. So don't be afraid of the latter !!

Thanks for the replies. @menopausalmare yes I've considered it but at the moment the rate is low so I'm probably better off with savings or investments but it's a good point and might be worth building some savings specifically to overpay later.

@isthewashingdryyet not heard about the flowchart, will check that out thanks. Sounds like useful rules of thumb.

@Biggaybear ah yes thanks I always forget the pension is locked away for ages, that's a really good point. I do know the pension is also invested, it's just it's kind of there as a package without much choice or research needed (because it makes sense to take the workplace one over a SIPP due to the subsidised fees). Whereas my S&S ISA I feel very unsure whether I've gone for the right choices at all!