SSAP for Share Investment Vs Pension Contribution

Hi,

I am the director of a company and will have about 50k of profit this year - I looked at a few options in a previous thread :

and have now decided that I have two options to consider:

(1) Start a SSAP and invest in the Top10 shares on the ISEC, this will cost about €2500 to setup and have an ongoing charge of €1100 per year. There will also be execution costs to get my hands on the shares but after that I would just leave them in the fund for the next 20 years. So the ongoing cost would be to the pensioneer trustee for the compliance work. There is a possibility that I would like to invest in property in the future and it feels like the SSAP would be a good way of doing this also. This is probably 5 years away though.

(2) Make a lump sum contribution to my pension fund - I have a DC fund in place at the moment which I may decide to lodge money into or I may decide to start a new fund with a different provider to spread the risk. This is pretty low cost, just execution fees for the transaction and then the fund management charges per year (probably 0.75%). However I also realise that there are additional charges factored in using the Unit price.

Can anybody provide advice that would help me decide between the two options.

Any help greatly appreciated.

JavMaster.

This doesn't really answer your query but I see in yesterday's Sunday Tribune that borrowing within a pension fund may soon be banned...again. This may affect your future plans.

Jaymaster,

I am in a similar position. What did you decide to do?

Hello,


Giving the running costs of a Small Self Administered Scheme V Personal Pension, the pension will win hands down, as you have not taken into account, that for revenue approval, you also have to have a actuaral evaluation on your funds done, and you may also wish to employ someone to act as trustee for your pension,

I also think you'd be crazy to go for SSAP rather than an off-the-shelf fund.

The idea behind buying and holding 10 stocks is that it's the lowest-cost way of investing a lump sum for the long term because it avoids the management charges imposed by fund managers.

The idea has no validity in the pensions world because, to build your own portfolio within a pension, you have to use a SSAP, which as you know is very costly. An off-the-shelf pension fund would give you access to a lot more than 10 stocks for a fraction of the cost.

If you decide to go for property later on, you can always set up a stand-alone SSAP for that purpose.