Are there pension products that you can invest proceeds in equities?

Donald Trump

Suppose that for diversification purposes you wouldn't mind investing in equities for long term i.e. retirement (obviously pull capital back into lower risk as approach retirement)




Are there any personal "pension" products where one could, for example, deposit the max allowed amount of pre-tax salary into the pot and then be able to actively manage or allocate that pot to equities over time? Or even if you could change allocation of the pot between cash and an index-linked product whenever you wanted - but you just couldn't withdraw it until retirement.

coylemj

You can allocate your money straight into equities by selecting a fund which is heavily or completely skewed towards equities. For example the Zurich Prisma 6 fund is 91% invested in equities. It depends on what pension product you choose but in most cases, the customer can select a fund or mix of funds and that's when you make decisions about what risks you're prepared to take.

Donald Trump

Can you do it as a once-off if you know what I mean.

Suppose you have a bit of spare cash you want to play around with. Can you just fire 20% (say if that's the allowed amount) into any old fund and claim it's for your retirement to get tax back on it, or are there special funds or products that you have to invest in?

jimmy456

Donald Trump wrote: »

Can you do it as a once-off if you know what I mean.

Suppose you have a bit of spare cash you want to play around with. Can you just fire 20% (say if that's the allowed amount) into any old fund and claim it's for your retirement to get tax back on it, or are there special funds or products that you have to invest in?

You have to be within a pension wrapper first. Once you have this sorted you can pretty much invest in whatever you want. Look into Self Administered Pensions for more on this.

Donald Trump

coylemj wrote: »

You can allocate your money straight into equities by selecting a fund which is heavily or completely skewed towards equities. For example the Zurich Prisma 6 fund is 91% invested in equities. It depends on what pension product you choose but in most cases, the customer can select a fund or mix of funds and that's when you make decisions about what risks you're prepared to take.

Well I'd imagine I'd have a bit more of an appetite for risk if:
A) I'd be looking at a long term time horizon for it to be in the pot
If I'm getting it net of tax, then I have a bit of a buffer compared to investing after-tax income.





I might suggest it to the oul' fella as well. He pays a fair bit of tax and wouldn't be maxing out his contributions I'd say. He could bung a lump into it and have the saved tax as a buffer to absorb first loss. And then access it when he retires (I think there are other conditions restricting when you can access it). Or would you still be liable on the "net" amount for tax when you withdraw it so that they loss would be shared?



Why would everyone who might have a few quid not do this? Or maybe they do!

Donald Trump

How does it work if you have tax free income, say you rent a room or rooms in your house for the max of 14k a year?

You have a job that pays 36k a year. You're at an age where say you can put 20% of your income into a pension tax free. Can you put in 10k or are you limited to 7.2k? i.e. is the 20% based off your full income or the income you have to pay tax on?

jimmy456

you can only pension employment or trading income