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  • FIRST POST
    • JustAnotherSaver
    • By JustAnotherSaver 12th Mar 17, 4:44 PM
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    JustAnotherSaver
    Workplace pension or private?
    • #1
    • 12th Mar 17, 4:44 PM
    Workplace pension or private? 12th Mar 17 at 4:44 PM
    With the minimum we have to pay in being 1% at the moment, I am with NOW Pensions paying in an additional 9% to make 10% whereas my wife & sister are with NEST paying in the minimum of 1% but would like to pay in more.

    I was told maybe late on last year on this forum regarding paying in extra that either NEST charge whereas NOW don't for extra payments in or that NEST charge more than NOW, i can't remember which it was that I was told.

    All 3 of us also pay into a S&S ISA. My wife & I are with Old Mutual Wealth through an IFA whereas my sister is with Hargreaves Lansdown on her own but will be going through an IFA later in the year.


    So really the point of this thread is that they are wondering about paying in extra to a pension but with the charges NEST has that i was told about they were wondering if it'd be better to pay their extra into their NEST workplace pension or whether it'd be better to open up a new private pension (probably would be IFA managed or at least discussed with an IFA) & pay the extra into that.

    Note: Neither employer will pay anything above the minimum, so there's no matching going to happen to their workplace pension.

Page 1
    • xylophone
    • By xylophone 12th Mar 17, 7:24 PM
    • 21,285 Posts
    • 12,220 Thanks
    xylophone
    • #2
    • 12th Mar 17, 7:24 PM
    • #2
    • 12th Mar 17, 7:24 PM
    https://www.nestpensions.org.uk/schemeweb/NestWeb/public/members/contents/costs-and-contributions.html
    • JustAnotherSaver
    • By JustAnotherSaver 12th Mar 17, 7:48 PM
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    JustAnotherSaver
    • #3
    • 12th Mar 17, 7:48 PM
    • #3
    • 12th Mar 17, 7:48 PM
    So, they take 1.8% of every contribution that goes in as well as an additional 0.3% of the entire pot once per year.

    I don't really know how this stacks up vs other options (although the workplace pension side of things is limited to whatever the employer decides to select) but more than that i don't know how that stacks up vs private pensions really. Is that expensive, cheap, the average rate?

    • xylophone
    • By xylophone 12th Mar 17, 7:56 PM
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    xylophone
    • #4
    • 12th Mar 17, 7:56 PM
    • #4
    • 12th Mar 17, 7:56 PM
    Have a look at the chart here

    http://www.moneysavingexpert.com/savings/cheap-sipps

    For myself I'd pay in the basic amount to NEST to get the employer contribution and start a personal pension/SIPP.
    • bigadaj
    • By bigadaj 12th Mar 17, 7:57 PM
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    bigadaj
    • #5
    • 12th Mar 17, 7:57 PM
    • #5
    • 12th Mar 17, 7:57 PM
    So, they take 1.8% of every contribution that goes in as well as an additional 0.3% of the entire pot once per year.

    I don't really know how this stacks up vs other options (although the workplace pension side of things is limited to whatever the employer decides to select) but more than that i don't know how that stacks up vs private pensions really. Is that expensive, cheap, the average rate?
    Originally posted by JustAnotherSaver
    It's pretty expensive, a good aim would be around 0.5% total cost.

    Cavendish offer a number of pensions from large insurers that are around that level, have a look at their website.
    • zagfles
    • By zagfles 12th Mar 17, 8:06 PM
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    zagfles
    • #6
    • 12th Mar 17, 8:06 PM
    • #6
    • 12th Mar 17, 8:06 PM
    It's pretty expensive, a good aim would be around 0.5% total cost.

    Cavendish offer a number of pensions from large insurers that are around that level, have a look at their website.
    Originally posted by bigadaj
    It's only expensive in the early years when the pot is quite small anyway. Over a working life the NEST initial/annual charge is a lot cheaper than a pension charging 0.5%pa with no initial charge.
    • JustAnotherSaver
    • By JustAnotherSaver 12th Mar 17, 8:25 PM
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    JustAnotherSaver
    • #7
    • 12th Mar 17, 8:25 PM
    • #7
    • 12th Mar 17, 8:25 PM
    Wow that's a head fry.

    I know nothing about this area at all & they know even less than I do.

    If they did decide to go down the private pension route then it wouldn't be getting online & doing it themselves as like myself they have zero confidence in doing it solo. Sure anyone could pick anything but anything isn't necessarily a good thing. They'd very likely go down the IFA route.

    If that makes a difference.

    • bigadaj
    • By bigadaj 12th Mar 17, 8:39 PM
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    bigadaj
    • #8
    • 12th Mar 17, 8:39 PM
    • #8
    • 12th Mar 17, 8:39 PM
    It's only expensive in the early years when the pot is quite small anyway. Over a working life the NEST initial/annual charge is a lot cheaper than a pension charging 0.5%pa with no initial charge.
    Originally posted by zagfles
    You're saying nest is a good deal without employers contributions?
    • zagfles
    • By zagfles 12th Mar 17, 9:02 PM
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    zagfles
    • #9
    • 12th Mar 17, 9:02 PM
    • #9
    • 12th Mar 17, 9:02 PM
    You're saying nest is a good deal without employers contributions?
    Originally posted by bigadaj
    I'm saying 1.8% initial charge and 0.3% annual charge is cheaper than zero initial and 0.5% annual charge, assuming the investment timescale is 10+ years.
    • bigadaj
    • By bigadaj 12th Mar 17, 9:13 PM
    • 8,939 Posts
    • 5,676 Thanks
    bigadaj
    I'm saying 1.8% initial charge and 0.3% annual charge is cheaper than zero initial and 0.5% annual charge, assuming the investment timescale is 10+ years.
    Originally posted by zagfles
    So that's a no then?

    Think I know where my money is going.
    • zagfles
    • By zagfles 12th Mar 17, 9:27 PM
    • 11,767 Posts
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    zagfles
    So that's a no then?

    Think I know where my money is going.
    Originally posted by bigadaj
    You claimed NEST is "pretty expensive, a good aim would be around 0.5% total cost". You are wrong. NEST is in fact cheaper than your "aim" if you're investing over a few decades, as pensions tend to be. That was what I was saying.

    Obviously there are other issues like investment choice etc, personally I want more control over my investments. But for someone who doesn't, NEST could be a good option. Even without employer contributions.
    • JustAnotherSaver
    • By JustAnotherSaver 13th Mar 17, 11:07 AM
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    JustAnotherSaver
    Am I correct in thinking that for the employer NEST is free whereas with NOW Pensions there is a monthly charge depending on how many employees you have??

    If this is correct then I've no idea why my employer chose to go with NOW Pensions as it's not like them at all.

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