Willowman : I have some friends who, 3 months ago invested 10k in premium bonds and in fact they have received a better return from the bonds than they did from the bank ! Strangely enough - on average premium bonds seem to be a fairly good bet at the moment - better than the banks anyway. Don't bank on getting the jackpot though <img src="wink.gif" border="0">
That said you do "appear" to get more tax relief from AVC's into a pension scheme. The question that we all have to ask ourselves now is :- With people living longer, and becomming more of a drain whilst they 'persistantly continue to live longer' (tongue in cheek) <img src="wink.gif" border="0"> the returns from a pension scheeme at retirement may not be all they seem at the moment perhaps ? - Who knows ! Certainly not me, not for sure anyway !
What I find out of order with pensions (my understanding anyway) is this : After being on a pension and subsequently leaving this earth, the remaining funds return to the pension company to pay off some fat-cat or increase the pension companies profit. I think that the remaining funds should go to the surviving relatives. Which brings me quite neatly onto my next suggestion....
Why not invest in bricks and mortar ? If you take out a mortgage on a place, get a lodger in to cover the mortgage payments (or there abouts) you will have an investment that will certainly be index linked and when you retire you could either :-
A) Live off the rent money in your retirement. Die and pass on the house to your relatives.
B) Sell the place, bank the money and live off the interest. Die and pass on the money in the bank to your relatives.
C) Move into it, sell your main house, which is probably bigger, bank the money and live off the interest. Die and pass on the money in the bank to your relatives.
...Or variations on the above. The long and the short of it is that if you go down this route you actually have an asset which belongs to you rather than one that doesn't.
Pension companies can go bust - but I've never seen a house that did
IMHO I'd recommend a combination of investments.
Unfortunately, BWA who I worked for have ceased trading and left me well and truly up the creek, so I would highly reccommend the mortgage protection insurance, even though it takes 3 months to kick in (by which time you have another job, anyway.)
Hope this gives you food for thought...
And if it does can I have a 737 job ?