Presenter: Vincent Duggleby

Guests: Michelle Cracknell, Tom McPhail

TRANSMISSION: 12th NOV 2001 1500 - 1530 RADIO 4

ANNOUNCER : It's two minutes past three and time for MONEY BOX LIVE with Vincent Duggleby

DUGGLEBY: Good afternoon. We're talking about pensions on this Money Box Live. No-one would argue with the need to save for retirement and the sooner you start the better. The question is how much to save? - where to invest the money to ensure a decent return? - and what sort of income you can expect when you give up work? 08700 100 444 is the number to ring if you'd like to discuss your pension arrangements or lack of them with the Money Box Live panel of experts.

For those in company schemes based on a guaranteed percentage of final salary, the risk is carried by the employer, but for the self employed and others in so called money purchase or defined contribution schemes, prospects look rather bleak. Funds have been hit by the fall in share prices and the drop in interest rates which stand at their lowest level for nearly half a century. Critically this effects the amount of income that you can buy in the form of an annuity which is compulsory by age 75. Most people don't want to take a risk and that's why with profits policies from insurance companies designed to smooth out risk have proved very popular over the years. But now those profits and in particular the terminal bonuses are being cut back, so projections made when interest rates were much higher are looking increasingly suspect.

Some people have turned to property as a better home for a retirement nest egg but they're disregarding the tax relief which you can still get on pension contributions. Whether it's a good idea, only time will tell. Meanwhile the government's stakeholder pension has met with a lukewarm reception. It's designed for the less well off but only 400,000 out of around 5 million in the target group have signed up. Financial Services Authority just published pension league tables to compare charges, but going ahead without independent advice could be a big mistake.

The advice on Money Box Live comes with no strings attached and we were incidentally very pleased at the this past week to be awarded the accolade of best personal finance programme of the year by the Bradford & Bingley. So, let's keep up the good work with the help of two experts in retirement planning - Michelle Cracknell from Advisory and Brokerage Services, and Tom McPhail who's head of pensions at Wolverhampton based Torquil Clark who's joining us on the phone from Wolverhampton. First caller is Yvonne in London - Yvonne are you there?

YVONNE: Oh yes I am yes. Hello yes - I'd like some advice on the stakeholders pension. I'm 62 and currently working though an agency. The agency has now chosen one of the companies to arrange for me to have a stakeholder pension. I'm a bit confused and wondering whether it is a good idea for me taking into account my age and the inconsistency of my employment?

DUGGLEBY: Yvonne you're presumably able to draw your state retirement pension?

YVONNE: Yes I am

DUGGLEBY: And are you doing that?

YVONNE: Yes I am

DUGGLEBY: Right - at 62 is it a bit late to be starting a pension Michelle?

YVONNE: That's right - that's what I was wondering because they've actually drawn out an illustration for me and you know

DUGGLEBY: Well anyway let's put it to Michelle?

CRACKNELL: The advantages of contributing into the pension scheme is that regardless of your age you will get tax relief on the contribution going on. The disadvantage of- of investing in a pension is that it does convert your cash available now into an income for the future and depending upon your overall financial circumstances you may not want additional income in retirement.

DUGGLEBY: Your other choices Yvonne of course are just to save the money with something like an individual savings account where ultimately the capital will be under your control, and I wonder whether Tom McPhail would you regard somebody of 62 perhaps as not finding a pension the best thing to start at that age?

MCPHAIL Well clearly any money invested now is not going to have the same effect as if - as if it had been at the age of 30 for example, but I think - I think the important question is the balance of your financial planning - how much you want to commit to the pension? - which as Michelle said is then going to get converted into an annuity, is therefore going to be locked up, you've lost the capital and exchanged it for a guaranteed income for life -nothing wrong with that for some people. For some of their money that will be extremely desirable as against putting the money into an ISA where you might be looking at fluctuating returns, but against that you've still got control of the capital. And I think for most people the most important answer is to have a balance of the two. You want some guaranteed income in all probability and still to retain some control of your capital.

DUGGLEBY: And remember Yvonne if you do go the other savings route, the ISA or something like that you can always change your mind at some stage and buy yourself an income - it's always possible to turn capital into income, but it's less easy to turn income into capital once its in the form of a pension. I would personally favour the savings route with an ISA but I don't know Michelle would you perhaps for Yvonne?

CRACKNELL: It depends on her overall circumstances, but I think the point is to get the balance between all types of investment.

DUGGLEBY: Okay. Maureen in Falmouth

MAUREEN: Hello

DUGGLEBY: Your call now?

MAUREEN: Well I'm totally unprepared for retirement. I'm 55 years of age - I only do a part time job - teaching job - point four of a week. I've got no pension plans whatsoever and I have credit card debt - what's your advice for somebody like me?

DUGGLEBY: Well you will have some pension I take it Maureen if you've been making contributions to the state pension scheme.

MAUREEN: But only for the past two years.

DUGGLEBY: That's - you've only had a job in the past two years?

MAUREEN: No I've only been contributing in the past two years

DUGGLEBY: To the state scheme - if you've been employed you will have been contributing anyway.

MAUREEN: Oh right - okay

DUGGLEBY: So all is not lost. But I think we'll ask Tom - I mean you need an audit on this one don't you just to see where Maureen stands?

MCPHAIL : I think absolutely yes, and one very good place to start is to get in touch with the DSS up in Newcastle and ask them for a forecast of what your state pension benefits are going to be. I have to say my instinct given what you've outlined is to say yeah clear that debt first - borrowed money is expensive money. Worry about the longer term savings once you've

MAUREEN: Would you clear the debt with another loan?

MCPHAIL : You may be able to refinance it at a lower rate. So I wouldn't - certainly wouldn't exclude that as an option and credit cards even with - with bank base at 4% are still charging around 18% so they're pretty punishing sort of rates.

MAUREEN: Where would you go to to clear the credit card debt?

DUGGLEBY: Well possibly I think it's the sort of thing that citizen's advice bureau might help you with - you've got to be jolly careful with this. I mean - this is not a programme about debt. We do have programmes about debt, but it's a dangerous thing to start signing up - building up more debt to pay off the first lot. Michelle I don't know whether you've got any particular comment to make on this?

CRACKNELL: I agree with Tom - my initial instinct is that the debt should be paid off before worrying about pension contributions. A general comment - not specifically for you Maureen is that depending on your earning levels you may want to be making additional contributions into a stakeholder rather than your occupational scheme. That's a general comment. I still go back to pay off the debt.

DUGGLEBY: But as I say as far as your pension is concerned all is not lost. I mean whatever else happens you are paying the state contributions and there is the basic state pension to look forward to - whether it's a full sized one - in other words whether it's based on enough working years I can't tell you but you will be able to get that if you write to the DSS or go round to your local DSS to find out what your position is.

MAUREEN: Right - if I'm able to clear my debt quickly - what would you say that I should do to build up some sort of a pension - other than the state pension?

CRACKNELL: You could investigate making additional pension contributions - depending on the level of your earnings, if you're earning less than �30,000 it could be better off putting your contributions into a stakeholder plan rather than the AVC arrangement offered as part of the teacher's pension.

DUGGLEBY: But you can ask the teachers what the arrangements are for their AVCs - they will tell you if you ask them

MAUREEN: Their ABC?

DUGGLEBY: AVCs - additional voluntary contributions.

MAUREEN: Right, thank you very much

DUGGLEBY: Okay thanks for the call. Gregor in London?

GREGOR: Hello there. I'm still only 28 but I started my pension four years ago and it was at a very low level of contribution - in fact there was �25 and I think it's now gone up to about �30 a month. Now what I want to know is should I continue paying in at that level considering that it obviously has about another 32 years to run or something. I'm thinking of this mainly because I'm aware that the first 10 years of any pension are taken up by charges and it's really only after about 10 years that it begins to really start to - to make money and whether after that 10 year period that's when I should really think about putting bigger contributions into the fund?

DUGGLEBY: Gregor a few personal details - married, single, children?

GREGOR: Single

DUGGLEBY: Single - right. Any likelihood that you're getting married or getting into a long term relationship - starting a family?

GREGORY: Possibly marrying within the next couple of years say

DUGGLEBY: Alright - well congratulations on starting as young as 24 - Tom - Tom McPhail in Wolverhampton - not many people start that young do they?

MCPHAIL : No they don't. And it's a shame obviously at the age of 24 a lot of people have got the priorities - there's a myriad things to spend your money on at that age, so I mean congratulations that you have started a pension that young because the money you save at that age will make an enormous difference at the other end. The earlier you start the better - an extra 5 years savings having started in your early 20s rather than your late 20s can almost double your retirement fund at the far end. So, it does make an enormous difference - so very positive that you've done that. Yes, you've got the charges you started - from when your pension started and Gregory was right that the set up charges on pensions can be - or were quite punitive - they're not nearly so bad now that we've had, with the arrival of stakeholder pensions. The question to ask is what proportion of your salary are you saving and - and without necessarily wanting you to - to

DUGGLEBY: Well no - let's do this because I think this is most important. Gregor - gross salary rough - cos we can tell you whether you're saving enough? - what's your salary?

GREGOR: Oh well I mean I'm self employed so it fluctuates.

DUGGLEBY: Well give us a figure - roughly?

GREGOR: Let's say about �20,000 a year

DUGGLEBY: Aha - yeah - I thought you might say - I think that yes - alright - carry on Tom then �20,000 a year - �28 a month not enough?

MCPHAIL : Okay. No - no by some measure - I mean I'd suggest if you - if you'd said �150 a month I'd have said great you know you're somewhere near where you should be. At �30 a month it's a good start but no more than that. And the fact that you've been doing it for the last few years again is very positive, but I would suggest you should be looking to increase that amount by as much as you can. If you start getting over �200 a month I'd say fine - worry about your other priorities but until then put as much as you can into your pension.

DUGGLEBY: And Michelle we heard from Gregor that he maybe thinking of getting hitched and things but he's got maybe two or three years - he could actually whack quite a lot in and then relax if he then starts having other commitments?

CRACKNELL: I think it's important that he has a reserve fund - a cash fund at his age and so if he doesn't have access to any other cash I would strongly recommend he builds up a cash reserve rather than worrying about increasing his pension contribution. As a rough rule of thumb people talk about paying 15% of salary into their pension scheme to get out a reasonable pension at retirement. However, before you worry Gregor, I would say that one wouldn't expect to be paying that at the young ages because there are other financial commitments - wanting to buy a house, wanting to get a mortgage that one needs access to cash and of course the pension scheme will not give you access to cash until you're at least aged 50.

DUGGLEBY: Good start Gregor.

GREGOR: Thank you. Can I just check with you before I go that the business of putting in money now - it is my concern that within those first 10 years the money that you put into a pension is - is swallowed up by charges

DUGGLEBY: But not - not so much now. The point is you're talking about what was the rule four years ago. The rule now is that - is that under the stakeholder Michelle it's a maximum of 1% is it - that they can charge?

CRACKNELL: That's correct.

DUGGLEBY: Yeah - so it's much much better. The world has changed. And I imagine that Norwich Union - just a word on this Tom. If you're changing your arrangements, presumably a firm like Norwich Union would be offering you terms for increasing your contributions on the current sort of charging regime would they?

MCPHAIL : Well, the simple answer is if you've got a pension already go back to your pension company and ask them on what basis would you treat any increases to my policy? If you don't like what you see - if they're still putting high charges on which I have to say is unlikely now, but if you don't like the look of it go and choose yourself another stakeholder pension.

DUGGLEBY: Okay, thanks for the call and Ian in Wetherby you're next:

IAN: Hello

DUGGLEBY: Your question?

IAN: Yes, I'm currently self employed, but I'm not in a position to make regular payments towards a pension. I was employed sort of properly up to the end of last year and had a pension plan, so there's some money there. I reckon I can probably put together a lump sum every year for the next two or three years somewhere between �1000 and �2000. Now, I'm currently holding that in an ISA.

DUGGLEBY: Can I - before you carry on - you say you've got a pension plan?

IAN: Yeah

DUGGLEBY: What was it? - was it a pension plan that had regular contribution? What did you do? - what's happened to it?

IAN: It was a personal pension plan

DUGGLEBY: With who?

IAN: Friends Provident

DUGGLEBY: Right - with regular contributions?

IAN: Yeah I was paying about �160 a month

DUGGLEBY: And you just stopped paying did you?

IAN: Yeah

DUGGLEBY: Well Tom, can you just clarify, what - what should have happened in those circumstances - it's for people who can't afford to pay in pension plan - do they suffer penalties?

MCPHAIL : Hopefully not. It does depend on how long ago the pension plan was taken out, and the older the pension plan is the more likely it is that it will have had those high up front charges that our last caller referred to which means that in the event that you stop contributing the pension company will come along and say - hang on we haven't had all our money off you yet so we're going to hit you for some extra charges. The more recent the pension is the less likely it is that they will do that.

DUGGLEBY: Right, it strikes me and are you still in contact with Friends Provident?

IAN: Yeah

DUGGLEBY: Cos, Michelle this is something where I think he's got some money to put in now - he's had a plan which seems to have partly lapsed or may have lapsed - bit of negotiation here would be useful?

IAN: Well basically because I couldn't anticipate being able to continue paying a regular amount.

DUGGLEBY: Yeah I appreciate what's happened but I just want to try and get you out of this slight hole Michelle?

CRACKNELL: I think again I'll repeat what I said to the last caller that as a self employed person on a low income, you do need to have a cash reserve and a pension fund won't provide that cash reserve for you. The second thing is your method of funding the pension is eminently sensible - the idea that at the end of each year doing a little audit of your finances, deciding how much you can invest towards a pension and making a single one off contribution does work for pensions and you therefore not in a commitment of making regular contributions when your earnings are fluctuating.

DUGGLEBY: That would be fine though if Ian you'd set up the plan originally without fixed contributions that's absolutely fine, but the trouble is you did set it up with fixed contributions and it's - I think you should go back to Friends Provident and find out what the position is if you wish to renew payments of some sort because Tom, it may well be he could actually you know use this �1500 to carry on paying the original contributions he had at least for a couple more years or so- would that be an answer?

MCPHAIL : Which conceivably would be appropriate if he's going to get hit for a penalty - if he doesn't do that - I think - I think as you said, talk to Friends Provident and find out what charges if any they are applying, and then look to move forward from there putting that money, as Michelle said, go for your cash reserve first and then look to save that money either into the same plan or don't be afraid to go for a new one if you don't like the look of what Friends Provident are offering.

DUGGLEBY: And presumably Friends Provident offer a stakeholder don't they?

MCPHAIL : Yes they do

DUGGLEBY: Yeah, so that would be again as we've said to previous listeners - that's the one that has the very low charges Ian.

IAN: Right

DUGGLEBY: Okay?

IAN: Okay

DUGGLEBY: Thanks for the call and Frances now in Whitney?

FRANCES: Oh hello. I retired on the last day of July this year and I'm 62 now. I'm managing on three small pensions but I have a total of �11,000 from four different pension funds with which I've got to buy an annuity. I'm wondering firstly should I delay buying an annuity until the rates are better? - and secondly will the total amounts that were quoted have reduced now? - in other words will the �11,000 have gone down?

DUGGLEBY: We need to know what plans they are - have you any idea whether they were with profits or unit linked or what they were?

FRANCES: I don't think they're any of those

DUGGLEBY: Mmm - that's

FRANCES: Or should they have been with one of them?

DUGGLEBY There'll have to be something - I mean they could be a lot of things. The point is we can't tell you what the plans are worth because we simply don't know what they are. If you were quoted �11,000 in July it's possible that that maybe the sum you'd get -because it may well be that you are in some form of plan which if it's a with profits plan

FRANCES: It was from four different providers.

DUGGLEBY: Yeah well that makes it even - even more difficult - but anyway let's start from the point of view of �11,000 in the pot Michelle - what are you going to do?

CRACKNELL: Well obviously you've got to convert that into buying an annuity. You should be able to take a cash sum if you want to out of the

FRANCES: Two of them - two of them say I can take a cash sum - the other two don't

DUGGLEBY: Is that because they're AVCs? - additional voluntary contribution plans?

FRANCES: One was.

DUGGLEBY: Yeah that there - I'll just explain for the benefit of people who don't understand that - so AVCs you can't take the lump sum out of - unless they were before l987. But that's just a side issue this point of whether you take the cash sum or whether you don't.

CRACKNELL: Yeah, the next question about buying an annuity - there are no indicators at the moment that the annuity rates are going to improve, so there's no point in deferring the annuity for the hope that in 6 months time annuity rates are going to improve.

FRANCES; I was thinking of delaying for years or is that not sensible?

CRACKNELL: The problem with delaying for years is of course what happens if you die and then you've received no benefit at all having scrimped and saved into these pension plans - they are ultimately for providing for you and if you leave it then you may not benefit at all. And that's the worry I have about delaying for two, three, four years.

DUGGLEBY: Tom, have you got off the top of your head what �11,000 will buy for somebody aged 62?

MCPHAIL : You'd be looking at a yield of around - off the top of my head - 7/8 percentage so you're looking at an income of around �800 a year - that sort of level.

DUGGLEBY: And if you left it say for three or four years the bad news if the annuity rates even didn't change you don't get an appreciably larger amount? - might get point one eight two percent.

MCPHAIL : There's two points there - one is that we can see a number of pressures which would drive annuity rates down over the next six to twelve months, so I'd say if it's a question of buying now as opposed to in a few months time go now. Also, if you run the numbers - buying an annuity now and getting the extra income, getting that �800 a year for the next few years means that even though you'd get a higher rate in a few years time you've missed on the income that you would have got in the meantime. So it will actually take you until about the age of 75 perhaps higher to catch up. I'm inclined to agree with Michelle - take the money now.

DUGGLEBY: Have you got an incredibly long living family? - do your mothers survive to say 100 or something?

FRANCES: No in their 80s - on average

DUGGLEBY: Well - going to say if you're going to draw the income for the next 30 years it might just possibly be worthwhile doing it - but in a sense we don't know what our life expectancy's going to be and the more you put it off in a sense the less income you're going to draw. Okay, so go ahead with that but you'll need to use what's called the open market option Frances - you know what that is?

FRANCES: No

DUGGLEBY: Tom will tell you?

MCPHAIL : Very, very important. Don't just take the annuity thing offered to you by the companies you've been investing with - go to a financial advisor, preferably an independent financial advisor, get them to search the market for you and find the best rates on the market from all the annuity companies. That's the open market option. It's getting you the best rate that they can.

DUGGLEBY: Okay

FRANCES: Right, thank you very much

DUGGLEBY: Ted you're in Redruth - what can we do for you?

TED: Hello I'm a 57 year old fairly unhealthy male. I have put my money so far into buying property which I let. And I did have a small pension when I bought an annuity. My question is if I sell one of the properties and come up with a few thousand spare, can I buy another annuity with the proceeds?

DUGGLEBY: You can, and Michelle will explain, but it's not the same as a pension annuity?

CRACKNELL: That's right. With money that's not in a pension fund you can buy an annuity - an annuity being an income that's paid for the rest of your life, but the annuity that you would buy is called a purchase life annuity. Now a purchase life annuity does have certain tax advantages over a pension annuity in that some of the income is not taxed.

TED: I'm getting interested

CRACKNELL: However, in the other ways it remains like an annuity so it's paid for the rest of your life and it's interesting you made the comment about your health - obviously if your life expectancy is shorter than one would expect for your age, it would be very unusual for you to go out and buy an annuity.

DUGGLEBY: Not impossible. Let's just pick up there Tom - if an annuity was desired you can do an impaired life annuity can't you?

MCPHAIL : Yes you can. You can get them under written and I've got to say that whilst purchase life annuities enjoy better tax treatment, the rates are not as good as pension annuities precisely because most people that buy purchase life annuities are people who are happy to take a bet on living a long time. So, yes if you're going to go into an annuity it would make absolute sense to go to an annuity company and say look let me show you my medical history, look let me give you a breakdown of my lifestyle - I think you should pay me more than the standard rate because you might not have to pay it for as long as would be the case as the average.

DUGGLEBY: I suppose this is the problem of course for many people who are making the decision that property is a better investment for their pension - I mean we know from the calls we've had and the letters we get and e-mails to Money Box that many people say oh rubbish to pension funds, just put all your money in property. Because there does come the time when you've got to convert this into an income and there will come a time when you don't want the hassle of managing the property itself however good an income it's producing. So there is this dilemma and is there any other alternative - I mean to the purchase life annuity? I suppose you just have to simply go into the market Michelle and get yourself a little portfolio of investments - gilts, bonds and things like that?

CRACKNELL: That's right and looking at the lower end of the risk spectrum and investments that are providing a level of income that satisfies the amount you require from the capital.

DUGGLEBY: I mean need to make it clear there's no magic about the annuity - it is simply the fact that the income is guaranteed once you get it whereas any other type of income could fluctuate?

CRACKNELL: That's right yes

DUGGLEBY: Alright - let's move on now to Sally in Glasgow

SALLY: Hello

DUGGLEBY: Hello Sally

SALLY: Hi. My question is that I'd like to provide for myself in old age but I'm not even sure if a pension is the right thing for me - sounds like some of your listeners have the same idea as well

DUGGLEBY: How old are you Sally by the way?

SALLY: I'm 30

DUGGLEBY: 30 right okay - what's your income?

SALLY: I have a yearly income of around �12,000 - part of that is private and part of it is from self employed projects.

DUGGLEBY: Can you tell us what the self employed income is?

SALLY: It's from environmental projects

DUGGLEBY: Yeah well how much is it roughly?

SALLY: Oh that's probably about - well it's roughly about �6,000 a year

DUGGLEBY: Okay so it's actually what we define as a very very small income?

SALLY: Yeah

DUGGLEBY: Okay well let's ask Tom - aged 30, you've heard the details, obviously a stakeholder is possible but would it be desirable?

MCPHAIL : My inclination is to say yes but can I just ask Sally what alternatives did she have in mind?

SALLY: Well I have - I've inherited about �30,000 worth of shares and I also have �60,000 worth in properties and I don't have any debts.

MCPHAIL : Okay which is if you like is a good start but it's not going to buy you much of a standard of living in retirement, not unless you happen to pick a very good stock broker. You will accrue an entitlement to some state pension from your employed earnings but again it will not be significant now the present government's done quite a lot in improving welfare levels with the introduction of the minimum income guarantee, so again you're going to get some state pension benefits, but my inclination would be to say if you can save for your retirement particularly as you already have some capital which will start to exclude you from welfare support, if you can save for retirement you would be well advised to do so. And as with previous advice stakeholder pensions are a good place to start looking.

DUGGLEBY: You'd go along with that Michelle?

CRACKNELL: Yes I do and I think the important point to make is that it's now possible to invest in a stakeholder pension even if your self employed earnings dropped you can invest up to �3,600 a year without having any earnings.

DUGGLEBY: And that's not the amount you actually pay in though - you actually pay in less?

CRACKNELL: Correct you pay in less the basic rate tax so it's �2808

DUGGLEBY: That's actually probably quite a good move for you Sally. The other bit I think one would hope that your share investment is going into ISAs as well - that's the individual savings accounts is it?

SALLY: No it's not at the moment - I was wondering about doing that.

DUGGLEBY: Well I mean if you're going to share investment the first �7000 a year ought really must be in ISAs - I mean you're holding the same stocks, it doesn't matter whether you're going through a broker or a unit trust manager or whatever it is - I mean you simply put the ISA wrapper round it, cos in the end that will provide you with tax free income whenever you need it. I mean you can roll the money up so I wouldn't disturb that if you're happy with your share investment and then divert if you can afford it out of your earnings put the money in the stakeholder pension - that way you're going to be able to build from the age of 30 - you're not going to do too badly with that sort of investment I'd have though - �3600 - stakeholder will work?

CRACKNELL: Yes

SALLY: I'm thinking if I could actually invest about �1000 a year - with the stakeholder pension is it possible to do that sum?

DUGGLEBY: Oh yes you can yeah yeah - you can invest as little as �20 a week. But as I say over a period of time from that age it should build up into a useful income.

SALLY: Okay

DUGGLEBY: Okay Sally thank you and it's John in Leamington.

JOHN: Hello

DUGGLEBY: Hello John

JOHN: I'm a 62 year old self employed craftsman. I've got a maturing Pep and a maturing Tessa totalling about �22,000. Would a stakeholder pension be a good home for that money?

DUGGLEBY: 62 year olds again - we've got - you're the second one with that sort of problem. Michelle, probably the same advice that we gave last time isn't it? - you know depends whether your need for capital or income is the priority?

CRACKNELL: That's right. I think the one option with the maturing Tessa is obviously to convert it into the new style ISA which has the benefits of no tax on the interest. The benefits of ISAs over pensions is that you do have access to the capital sum and you're not committed to buying an income for the rest of your life. If you wanted to take the money and then invest it with the benefit of tax reliefs into another pension policy you are effectively making a decision to convert capital into income which is less flexible, probably a better answer tax wise. Can't really give you an answer except maybe the advice we've given before is sometimes it's best to have a bit of both.

JOHN: Right, I mean I have got - my wife and I have several mini ISAs so we don't actually need that �22,000 liquid.

MCPHAIL : Okay, one option that could be explored here and it may not be right for you but I think it's worth mentioning is that up until the 31st January it is still possible to make a fairly substantial pension contribution and use a tax planning loophole to carry it back to the last tax year at which point you can then bring forward unused tax allowances and that might if you wanted to allow you to put the whole �22,000 into a pension in one go.

JOHN: So carry- carry back is a good idea?

DUGGLEBY: Yeah

MCPHAIL : Worth looking at I think

DUGGELBY: Worth looking at yeah. One quickly - we can't take the caller but very, very briefly can we just say where's the best place to invest for the next 15 years in a pension plan - with profits, unit linked, what?

CRACKNELL: It's typically - it's try and put as much into equities as you can if you're prepared to have the roller coaster ride in between.

DUGGLEBY: We still believe in equities on a 15 year view - is that right Tom?

MCPHAIL : Definitely yeah take the long view - go for equities and try not to look at it too often if you're of the nervous disposition.

DUGGLEBY: Thanks Tom. Tom McPhail from Torquil Clark joining us from Wolverhampton, and Michelle Cracknell from Advisory and Brokerage Services. If you'd like more details anything we've raised on the programme then you can ring the information line on 0800 044 044. Those calls are free and you can also read transcripts of the recent programmes and follow up particular items on the website: bbc.co.uk/moneybox. Don't forget to join Paul Lewis for MONEY BOX at noon on Saturday. I'll be back same time next Monday to take more of your calls on MONEY BOX LIVE.

BACK ANNO: That was Vincent Duggleby and the producer was Penny Haslam.