What are the pros and cons of opting in or out of the state second pension?
Anna Sofat: One of the key things to consider when making the decision is investment risk. The advantage of contracting out is that the benefit going to a personal pension which you control, you decide how it should be invested and you can take the benefits any time after the age of 50 (55 from 2010) and you can take 25% of the sum you accumulate as tax-free cash. If you decide to opt in, you will get a known pension at a known age and it will be index linked. It therefore boils down to what you feel comfortable with and how much interest and involvement you are going to take in your pension provision. Q: Derek: Is a personal pension as flexible as a SIPP? If not does this justify the higher charges? A: Steve Latto: Many personal pensions offer a lot of flexibility but not necessarily as much investment choice as a SIPP. There are various SIPPs on the market and charges tend to reflect the investment flexibility they offer. There are SIPPs that have a decent range of investment options
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