Self Employed (but a LTD company) and need a pension- no idea where to start

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francese_2
francese_2 Posts: 1 Newbie
in Pensions, annuities & retirement planning
Hi there,

I am currently working as a freelancer but have needed to become a LTD company.
I have no pension at all as yet and want to set one up but have no idea how to do this. Ive emailed a few people, been told about NEST..read abit more about it and frankly it sounds rubbish...

Any advice on places to go, how to go about setting one up?

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  • dunstonh
    dunstonh Posts: 116,373 Forumite
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    Self Employed (but a LTD company)

    First thing to realise is that you are not self employed. Important as this means doing things differently to someone who is self employed.
    Ive emailed a few people, been told about NEST..read abit more about it and frankly it sounds rubbish...

    it is a bit rubbish. It is aimed at very small companies who need to have an auto-enrolment scheme but do not have the staff numbers to make the conventional providers viable. Nest caters for the bottom end of the market.

    You dont need to worry about auto-enrolment if you do not employ anyone (and you are the sole individual). So, you can pick any individual scheme and not pick an auto-enrolment scheme.
    Any advice on places to go, how to go about setting one up?

    Any local IFA can advise you. Your accountant may have a link to an IFA. However, given the shortage of IFAs, you do tend to find that they look after wealthier clients more. If your contribution to the pension is going to be decent then they will likely help. If its going to be small, then looking at a DIY stakeholder pension may be the best option.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • LHW99
    LHW99 Posts: 4,216 Forumite
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    And it can be tax efficient if the ltd company pays the pension contribution directly.
  • atush
    atush Posts: 18,726 Forumite
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    you can go anywhere the sells PPs or Sipps to the general public. Just make sure the company pays your pension contribs directly, not paid to you first.

    If you went this way, and know nothing about investing, it would be good to use a general multi asset fund like Vanguard or go with a global tracker. You want cheap and diversified. Then you can spend some time here and elsewhere learning about investing.

    But you might be best off finding a local IFA and getting a quote for both set up and fund selection.
  • TheTracker
    TheTracker Posts: 1,223 Forumite
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    As an individual, open an account with an investment platform to hold a SIPP.

    As a Ltd Company, pay funds into this account directly.

    That's it. You now have a pension and your company has made a contribution and both you and your company have avoided tax and NI. The money is held in cash inside the pension. Simple.

    Choosing a platform takes a little more work. Fee is important. Range of products to invest in can be important. The type of products they sell, such as funds or ETFs may be of interest. To make sense of that maze, head to Monevator and see their analysis of platforms / brokers or use 'snowmans spreadsheet'.

    Choosing the funds to buy within the pension account you hold on the platform can be bewildering when starting. Chances are you are starting small. So a 'multi asset fund' is probably where you'll end up until you accumulate at least a few tens of thousands of pounds.

    Such funds offer variants based on your risk profile. So you need to work that out too, just how risk averse you are. Returns are rewards for volatility, so if you can stomach the ups and downs you reap more in the long term. Can you stomach a 50% drop in your funds in a year? Or only 5-10%? Maybe that depends on the size of your pot. Give this very careful thought.

    If all that sounds scary, or you have unusual circumstances, then pay an IFA to do it for you. But frankly an IFA is a large expense until you have at least those tens of thousands.

    While you're building up that pot over the next 12-24 months, educate yourself on how investments work. Remember, a 'pension' is just a 'tax wrapper'. It doesn't take a huge amount of work to learn. Then decide if you want to continue to Do It Yourself or use an IFA. But always understand the fees they charge versus the benefits they may bring you.
  • ThemeOne
    ThemeOne Posts: 1,471 Forumite
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    I was in the same position and opened a SIPP with Hargreaves Lansdown, though there are many other providers.
  • CFrog
    CFrog Posts: 86 Forumite
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    The following thread may help:

    http://forums.moneysavingexpert.com/showthread.php?t=5624787
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