Pension top up & investment help

[Aroundtheworldinaday]

I have a pension, with approx £125k in. I haven’t paid in for a few years for various reasons. I also have a small one of about £6k

I want to start paying back into my pension, but don’t know whether to top up the one I have, or start a new one.
I know less than nothing about pensions.
ideally I’d like one where I can put away different amounts per month rather than a set direct debit amount. Do they exist?. My current one will only allow a DD to be set up.

Bit of background, I have no plans to retire yet, the monthly amount will eventually be around £300 a month I can put away (in about 6 months time) but until then it will be much smaller amounts. I also plan to open an isa in the next few weeks.

In regards to the small £6k pension, I’m thinking that when I can withdraw this, I could invest it in stocks and shares, whilst £6k is nice, it’s not exactly life altering so I thought I’d try and make some money from it - would this be a good idea?.

As I said, I know little to nothing about pensions (which may be obvious with these questions!), so any help and advice gratefully received.

thanks

You can make regular or one-off payments into a SIPP.
I would probably open a new one, as I’m reluctant to put all my eggs in one basket, but am not a FA so they might disagree!

I know less than nothing about pensions

It's really important that you understand pensions and you don't need an FA - the information is available on YouTube (I'm in the process of learning about pensions & investments too!).

Rebel Finance School is often recommended on MN - its great and it's free. Do the 10 week course - they cover pensions and S&S ISAs.

You need to know what funds your current pensions are invested in and what the fees are

ideally I’d like one where I can put away different amounts per month rather than a set direct debit amount. Do they exist?

Yes. SIPP - self invested personal pension.

In regards to the small £6k pension, I’m thinking that when I can withdraw this, I could invest it in stocks and shares, whilst £6k is nice, it’s not exactly life altering so I thought I’d try and make some money from it - would this be a good idea?

I'd amalgamate the pensions. Invest them in an index fund which has all the benefits of a S&S ISA. I don't know how long you've got until retirement but you've got £131,000 right now - with further contributions and the tax relief they attract £300 will be £360 to invest - you could really grow your pension pot.

Disclaimer: I'm still learning too so please do the RFS course!

Thank you both

I shall look into your advice

You have not told us how old you are and roughly how many years you have to go until you may wish to retire or access your pensions.

You also haven't told us anything about your two existing pensions, what platform are they on, what are they invested in currently and what are the fees/charges?

You talk about S&S ISA allowing you to invest in stocks and shares, well you are 99.9% guaranteed to be already invested into various different stocks, shares and funds within your existing pensions.

A pension/SIPP or an ISA is just the tax wrapper, you can pretty much make the same investments in both depending on what platform you are using and what investment options they have. Think of pensions on getting tax relief when you pay in, but then you might have to pay income tax when you withdraw in the future. Think of an ISA as you have already paid income tax on that money, however if you save or invest in an ISA then any gains or dividends will be tax free.

Ideally you want both, however pensions likely make up the bulk of retirement savings for most people. Having a mix of both pensions and ISAs allows you flexibility on when you can take money, you could retire or semi retire at 50 if you have enough ISA money. Or you use the right mix of ISA and pension income after age 57 to minimise income tax.