How does everyone invest?

When my wife and I moved to London, we each took up employment on local offers with our respective companies.  With no US sourced income, we're unable to put money into a 401k or IRA. We don't plan on retiring in the UK, so aren't quite sure if it makes a ton of sense to put money into a UK pension given that we'll end up pulling out early and will likely be subject to some sort of penalties.  We still have a house in the US, and the principal on our monthly mortgage is really the only way that we're saving anything (outside of accumulation in a savings or current account here).

I'm wondering what other people have done or tried? Do you put money in funds back in the US? How well do you find that a US financial adviser caters to the tax implications of living abroad? We've been pretty unlucky finding someone to help us there, so any help is much appreciated.

You don't have to retire in the UK to receive pension benefits from a UK pension plan.  Unless you have a really good reason, you should participate in the UK plan if you are allowed!  You won't end up pulling out early, the money will just grow until you reach retirement age.

geetak is right, you'll be taxed on it when you take it to the states though.....so i don't participate (but my husb does)

I do all my investing online, self directed.  In mutual funds, stocks and cash funds.  it works right now.  we're looking to move back in under a year.

I still invest into my 401(k) as I still have my US benefits, even though I am a local employee.  I could still invest in ISAs and other securities here, but as of now, I don't plan on retiring here and was told it would not be benficial to invest in UK securities if I planned on staying in the UK short term (less than 3 years).  If I do decide to stay longer, I will look into investing in the UK and continue to invest in the US.