'What if my pension is crap?'
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Pension v SIPP v ISA: Which is best?
A Moneyin2 reader recently asked me a deceptively simple question: “Should I save in my workplace pension, or get my own SIPP, or use an ISA?”
Initially, my answer was that this is a no-brainer: Your work pension will almost always be the investment vehicle that gets you furthest, fastest. That’s because it comes with a 3% cash match from your employer and the money saved into it is not taxed. You keep 100% of the money that goes into your pension. That means you’re saving at least 20% of the money that would normally go to the government.
“But what if my work pension is crap?” the Moneyin2 reader said. Turns out her employer’s pension was offering only a basic set of “lifecycle” funds to invest in, where you pick the date you think you want to retire by and the fund invests to maximize your gains by the time the target date arrives.