Starting Pension age 40, self employed

sitamaya

Which is the best pension to get in this situation. Which company should I go to?

Murtle

How long are you thinking of working for and what kind of monthly amount are you thinking of investing???

dunstonh

Any of the current providers should do the job. Obviously some are better than others but that depends on how you intend to arrange it, what options you want and where you want to invest.

Starting a pension at age 40 plus being self employed (so you get a lower state pension) means you are likely to be paying around £300 plus a month into pension so you will have wide range of options available.

Murtle

why do you get a lower state pension if you are self employed??

dunstonh

There is no S2P or Serps (as it used to be called) for self employed. There is only the basic state pension.

WHA

Murtle wrote:

why do you get a lower state pension if you are self employed??

The self employed don't qualify for SERPS or state second pension etc - none of the usual "earnings/contributions" related state pension - just the basic pension (presumably made up to the "minimum income guarantee" if appropriate)

(Assuming that they are "self employed" for tax purposes and not trading through their own limited company, in which case they are employees for NIC purposes and as long as their "wages" from their company were high enough, would be contributing towards SERPS or S2P)

Sitamaya may well be better off not bothering at all with making personal pension contributions unless s/he is able to pay substantial amounts. With the current state pension rules, if his/her private pension is only going to be small, it may not increase their retirement income as the amount received from the private pension may reduce the amount of state pension received (under minimum income guarantee). An IFA will be able to do the projections to illustrate the required pension contributions.

EdInvestor

Hello Sitamaya

I suggest that you investigate the incentive system for the self employed to contribute to the state pension, which you wont get unless you make contributions.

The deal for the self employed is really excellent, perhaps about 8 pounds a month to get a full state pension when you retire - that's really cheap :)Much better than anything available from private companies.