Pension need to knows Official MSE Guide Discussion

credit_crunch

My husband is self employed and has no employees or sub contractors.
What the best, low risk pension schemes for him to start with?
Thinking of around £50 per month contribution.

He has only been self employed for 2 years & previous to that his last empoyer had started a pension with Royal London when auto enrolment came in.
Should he stick with Royal London? Or can he contribute to that with another new pension plan?

Thanks in advance

dunstonh

What the best, low risk pension schemes for him to start with?

A pension is just a wrapper for what you put inside it. There is no low risk pension schemes as you do not attribute risk to a pension. It is the investments you use that carry the risk and virtually all pensions have investments that cover the typical risk scales.

Thinking of around £50 per month contribution.

That very low contribution eliminates a good number of providers straight away. It's half the minimum contribution of most.

Is that really all that he can afford? its a token amount. Peanuts basically. And if you pay in peanuts, you are going to get back peanuts in retirement. For context, if you pay in £50pm for 30 years then you are likely to get back £75pm in real terms for 30 years (based on your investing too low risk). Could you afford to live on £75pm + state pension in retirement?

Is the pension contribution being made to provide an income in retirement or to allow you to tick a box to say you have a pension?
In other words, are you treating it as seriously as you should?

credit_crunch

Thanks for your reply.
I wrongly thought that all pension schemes have an element of risk.

£100 a month should be manageable, however over the winter months his income drops so if possible would there be a provider where he can adjust his contributions? By the same token there may be months where he can put in more than £100 to try to compensate for the quieter months.

As you’ve probably gather I or we are pretty clueless & don’t know where to start!

emmamed

firstly sorry if this is the wrong section to post this.

i am not working but want to start paying into a pension. i am 42 and got a small work pension which when i checked is worth £50 a month. i am wanting to start a private pension and pay in at least £100 a month, but the scheme has to have no minimim monthly feeto be paid, just if my circumstances change. can anyone point me in the right direction on where i should go. either get a FA or use a comparision site to find best deal, tyvm

dunstonh

i am not working but want to start paying into a pension. i am 42 and got a small work pension which when i checked is worth £50 a month.

Dont read anything into the income figures. They are projecting artificially lower than the real figure at this time.

can anyone point me in the right direction on where i should go. either get a FA or use a comparision site to find best deal, tyvm

With that amount, its probably easier and better just to add it to the existing workplace scheme. Especially if the employer does salary sacrifice.

Comparison sites are no good for pensions and investments.

greenglide

The OP, emmamed, is currently not working so salary sacrifice is out of the question.


The old employer's scheme may not allow any further subscriptions.

xylophone

am 42 and got a small work pension which when i checked is worth £50 a month.

Is this a deferred defined benefit pension?

For modest contributions you might consider a stakeholder pension.

https://www.pensionsadvisoryservice.org.uk/about-pensions/pensions-basics/contract-based-schemes/stakeholder-pension-schemes

https://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/aviva/

https://www.legalandgeneral.com/retirement/our-products/stakeholder-pension/

credit_crunch

Hi all
I posted on here a few months ago.
Just wondering where to start with a pension for someone who is self employed? Or is it best to speak to a pensions advisor?

IanWorthington

I'm trying to understand what happens if I start taking from my pension but then start working again and wish to add more to my pension account. It seems to be rather complicated. Can someone explain it clearly to me?

dunstonh

IanWorthington wrote: »

I'm trying to understand what happens if I start taking from my pension but then start working again and wish to add more to my pension account. It seems to be rather complicated. Can someone explain it clearly to me?

If you have a secure income (occ scheme/lifetime annuity) then there is no impact on future contributions.

If you have an unsecure income (drawdown taken from the 75% segment of your pension) then your annual allowance for contributions would be reduced to £4000 a year.