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    • TheLittleSaver
    • By TheLittleSaver 9th Mar 17, 4:28 PM
    • 12Posts
    • 0Thanks
    TheLittleSaver
    pension scheme for self employed (UK)
    • #1
    • 9th Mar 17, 4:28 PM
    pension scheme for self employed (UK) 9th Mar 17 at 4:28 PM
    Hi everyone

    I am 32 and live in UK, registered as self employed. I have been working here for around 4 years (so hopefully I won't be kicked out after Brexit), but like a stupid I never thought properly about pension until now! So I would like to start doing something about it, without wasting more precious time.

    I did a research, I know there are mainly three types of pension scheme:

    - Personal pensions
    - Stakeholder pensions
    - Self-invested personal pensions (SIPPs)

    And now the state pension is open to self employed as well.
    So, as far as I could understand, a SIPP might need too much "effort" and knowledge to do it properly, managing the risk, etc... so perhaps for my situation the choice would be between a personal pension and a Stakeholder pension?
    Also, I think I could/should start a state pension too? Or should I just keep saving my money, as I am already doing (as I always thought "I can put some money in another account each month, rather than putting that money in a pension scheme")?
    What can you suggest me?
    I would really appreciate any kind of suggestions you could possible give me, as this is a new territory for me and got a bit lost in all choices.

    Thank you very much!
    Last edited by TheLittleSaver; 09-03-2017 at 4:33 PM.
Page 1
    • xylophone
    • By xylophone 9th Mar 17, 5:00 PM
    • 23,079 Posts
    • 13,375 Thanks
    xylophone
    • #2
    • 9th Mar 17, 5:00 PM
    • #2
    • 9th Mar 17, 5:00 PM
    You are registered for tax and National Insurance?

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/597485/NICs_fact_sheet_final_web.pdf

    https://www.gov.uk/new-state-pension/eligibility

    https://www.moneyadviceservice.org.uk/en/articles/pensions-for-the-self-employed

    https://www.cavendishonline.co.uk/pensions/
    • ischofie1
    • By ischofie1 9th Mar 17, 5:25 PM
    • 180 Posts
    • 141 Thanks
    ischofie1
    • #3
    • 9th Mar 17, 5:25 PM
    • #3
    • 9th Mar 17, 5:25 PM
    I'd look at the personal pension route.
    • Horsin
    • By Horsin 9th Mar 17, 7:35 PM
    • 17 Posts
    • 2 Thanks
    Horsin
    • #4
    • 9th Mar 17, 7:35 PM
    • #4
    • 9th Mar 17, 7:35 PM
    Hi there

    If this link works have a look at it/copy and paste it.

    http://forums.moneysavingexpert.com/showthread.php?t=5614042

    I've had some GREAT advice from members here following a similar theme. Good luck
    • TheLittleSaver
    • By TheLittleSaver 10th Mar 17, 1:13 PM
    • 12 Posts
    • 0 Thanks
    TheLittleSaver
    • #5
    • 10th Mar 17, 1:13 PM
    • #5
    • 10th Mar 17, 1:13 PM
    Thanks @Horsin!
    I will read that as soon as I can.. although I must say I am still a bit confused about all these different choices available... anyway

    @xylophone
    sorry I thought I answred, but for some reason the answer didn't get through. Yes, I have a NINo (got it as soon as I moved to UK). Why? Would that mean that I am paying for saome "basic" pension by paying taxes?

    @ischofie1
    yeah I was thinking about a personal pension... but I am reading about so many people not very HAPPY about those... so now I am not sure if a personal pension would be the way to go, or maybe some other kind of investmen? I am still confused.
    • xylophone
    • By xylophone 10th Mar 17, 1:35 PM
    • 23,079 Posts
    • 13,375 Thanks
    xylophone
    • #6
    • 10th Mar 17, 1:35 PM
    • #6
    • 10th Mar 17, 1:35 PM
    Yes, I have a NINo (got it as soon as I moved to UK). Why? Would that mean that I am paying for saome "basic" pension by paying taxes?
    Read the first two links in my post above.
    • TheLittleSaver
    • By TheLittleSaver 10th Mar 17, 5:12 PM
    • 12 Posts
    • 0 Thanks
    TheLittleSaver
    • #7
    • 10th Mar 17, 5:12 PM
    • #7
    • 10th Mar 17, 5:12 PM
    @xylophone

    just did... so, if I undersstood correctly, I am entitled to the New State Pension and I don't need to do anything NOW, just claim it once I will reach the pension age? Is that correct?
    If so, that would be amazing! But I still need another pension, as I guess the New State Pension alone won't be enough.

    Also, how come you are suggesting "Cavendish Online FundSupermarket Pension"? Are you using it?
    What's the advantage of join it, rather than using someone else?
    • xylophone
    • By xylophone 10th Mar 17, 5:43 PM
    • 23,079 Posts
    • 13,375 Thanks
    xylophone
    • #8
    • 10th Mar 17, 5:43 PM
    • #8
    • 10th Mar 17, 5:43 PM
    I am entitled to the New State Pension
    Provided that you meet the contribution conditions as set out in the link.

    Also, how come you are suggesting "Cavendish Online FundSupermarket Pension"? Are you using it?
    What's the advantage of join it, rather than using someone else?
    It was somewhere to consider for setting up your personal pension.

    There are other providers!
    • TheLittleSaver
    • By TheLittleSaver 10th Mar 17, 7:16 PM
    • 12 Posts
    • 0 Thanks
    TheLittleSaver
    • #9
    • 10th Mar 17, 7:16 PM
    • #9
    • 10th Mar 17, 7:16 PM
    Provided that you meet the contribution conditions as set out in the link.
    Originally posted by xylophone

    "You’ll be able to claim the new State Pension if you’re:
    • a man born on or after 6 April 1951"

    and

    "You’ll need 35 qualifying years (on your National Insurance record ) to get the full new State Pension".


    To me this means that I am entitled for the State Pension and I will be able to claim it in full after 35 years of working (and so paying taxes). Am I correct, or am I missing something?
    • xylophone
    • By xylophone 10th Mar 17, 11:40 PM
    • 23,079 Posts
    • 13,375 Thanks
    xylophone
    To me this means that I am entitled for the State Pension and I will be able to claim it in full after 35 years of working (and so paying taxes).
    Read about National Insurance Contributions and "qualifying years" https://www.gov.uk/new-state-pension/your-national-insurance-record-and-your-state-pension

    http://www.which.co.uk/money/pensions-and-retirement/state-pension/guides/your-state-pension-and-benefits/how-do-i-qualify-for-state-pension
    • Suffolk lass
    • By Suffolk lass 11th Mar 17, 7:26 AM
    • 1,513 Posts
    • 17,172 Thanks
    Suffolk lass
    "You’ll be able to claim the new State Pension if you’re:
    • a man born on or after 6 April 1951"

    and

    "You’ll need 35 qualifying years (on your National Insurance record ) to get the full new State Pension".


    To me this means that I am entitled for the State Pension and I will be able to claim it in full after 35 years of working (and so paying taxes). Am I correct, or am I missing something?
    Originally posted by TheLittleSaver
    There are two elements to claiming the new State Pension:

    1. The number of qualifying years (i.e. the number of years you paid the minimum qualifying amount for it to count). If you are below the limit you can currently go back and pay for up to 6 years to make up gaps, if you want or need to)

    2. State retirement age - this would currently be 67 for someone who is currently 32. However, the cost of providing the state pension and the number of people living longer (and therefore the cost to the government) are rising so age 67 is expected to rise before you get there.

    Other things

    Legislation in 2010 made the minimum date that people can draw from their private (non-state-provided) pension 55 (unless your scheme gives you a reserved right to another, lower age, normally 10 years before the scheme's normal pension age - this reserved right won't apply to you).

    Most schemes are likely to align with state pension age if they are through an employer.

    The advantages of paying in to an employee pension is that your employer contributes too

    If you are attracted to a separate savings account there is a thing called a LISA (Lifetime Individual Savings Account) due to be introduced in April. It is for those in your age group (up to age 55) and you can pay in up to £4000 per tax year, to which the government will add up to £1000. It is intended for saving for one of two things - the deposit for a first time home-purchase or for retirement (currently age 60 to take the money without penalty).Mostly the providers of accounts on offer are cash at the moment but the Hargreaves Lansdowne Platform (website through which you buy your investments) is offering a shares based account.

    There is a whole area on the Forum where you can talk about and learn about these things, and lots of expert posters to help explain things.
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    • TheLittleSaver
    • By TheLittleSaver 11th Mar 17, 10:05 AM
    • 12 Posts
    • 0 Thanks
    TheLittleSaver
    Thank you very much @Suffolk lass for the exhaustive answer!
    • atush
    • By atush 11th Mar 17, 12:49 PM
    • 16,294 Posts
    • 9,962 Thanks
    atush
    @xylophone

    just did... so, if I undersstood correctly, I am entitled to the New State Pension and I don't need to do anything NOW, just claim it once I will reach the pension age? Is that correct?
    If so, that would be amazing! But I still need another pension, as I guess the New State Pension alone won't be enough.

    Also, how come you are suggesting "Cavendish Online FundSupermarket Pension"? Are you using it?
    What's the advantage of join it, rather than using someone else?
    Originally posted by TheLittleSaver

    There are different types of "taxes". To get a state pension you have to pay Nics. national insurance as opposed to income tax.

    Have you always been SE? Or have you ever worked for a company? Are you paying SE Nics right now?

    You will need a min of 10 years contributions to claim any SP.
    • TheLittleSaver
    • By TheLittleSaver 11th Mar 17, 1:55 PM
    • 12 Posts
    • 0 Thanks
    TheLittleSaver
    Hi @atush

    yes, I have always been SE, although sometimes companies paid me as PAYEE (this has been happening for the first couple of years, then I sorted it out and started getting paid only as SE).
    Anyway I have got an accountant who does my tax return every year, I remember asking her some clarifications about pensions and she said that it wasn't here "field" (which seems quite odd, in my opinion, what do you think?).

    Yeah I know I need at least 10 years, but it would be nice if I could see at which point I am now, so I can see if I am actually contributing to the SP or not (rather than just waiting 10 to 35 years and have a bad surprise...)

    I am sure there must be a link in the gov.uk where I should be able to check my personal situation, pension wise?
    • dunroving
    • By dunroving 11th Mar 17, 2:05 PM
    • 484 Posts
    • 194 Thanks
    dunroving
    Hi @atush

    yes, I have always been SE, although sometimes companies paid me as PAYEE (this has been happening for the first couple of years, then I sorted it out and started getting paid only as SE).
    Anyway I have got an accountant who does my tax return every year, I remember asking her some clarifications about pensions and she said that it wasn't here "field" (which seems quite odd, in my opinion, what do you think?).

    Yeah I know I need at least 10 years, but it would be nice if I could see at which point I am now, so I can see if I am actually contributing to the SP or not (rather than just waiting 10 to 35 years and have a bad surprise...)

    I am sure there must be a link in the gov.uk where I should be able to check my personal situation, pension wise?
    Originally posted by TheLittleSaver
    It depends on what information you were asking her for. Accountants are not allowed to give financial advice, as far as I know.
    • p00hsticks
    • By p00hsticks 11th Mar 17, 2:50 PM
    • 5,621 Posts
    • 5,174 Thanks
    p00hsticks
    Hi @atush
    I am sure there must be a link in the gov.uk where I should be able to check my personal situation, pension wise?
    Originally posted by TheLittleSaver
    you can get a state pension forecast from here
    https://www.gov.uk/check-state-pension

    you can check your NI record from here
    https://www.gov.uk/check-national-insurance-record
    • xylophone
    • By xylophone 11th Mar 17, 3:28 PM
    • 23,079 Posts
    • 13,375 Thanks
    xylophone
    you can get a state pension forecast from here
    https://www.gov.uk/check-state-pension

    you can check your NI record from here
    https://www.gov.uk/check-national-insurance-record
    If the OP had clicked on the links in my first post, he would have found all this information........
    • atush
    • By atush 11th Mar 17, 4:23 PM
    • 16,294 Posts
    • 9,962 Thanks
    atush
    And he should really know (as should his accountant) if they are currently paying SE Nics.

    Accountants SHOULD be au fait with the requirements of paying Nics, but they are not supposed to advise on personal pensions/sipps. So when you say 'Pensions' they can mean 2 different things, and your accountant I assume thought you meant personal pensions not state pension.
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