To NEST or not to NEST

GemQuin

Hi,

Sorry to piggy back off this last post but I have a similar question.

I'm 32 and don't have a pension and it is keeping me awake at night. I am a Freelancer and although I usually am in work, for the last 10 years I have taken a few breaks (to go travelling and have a baby).

The company I frequently work for has been enrolled in the NEST scheme. But I am on intermittently employed by them - can I still join?

So my question is - should I stick with NEST and start making contributions? If so, how much do I need to pay in to try to catch up with my lost years? Can I make a one off lump sum payment into any schemes? Or should I look for a Private Pension scheme?

Many Thanks in advance.

dunstonh

If the company say you are eligible to join and get the employer contribution then do so. It is "free" money.

If so, how much do I need to pay in to try to catch up with my lost years?

You need to start backwards.

How much do you want in retirement? Then how much lump sum is needed to pay that amount, then how much do you need to put aside each month to build up that lump sum using sensible growth rates and assumptions for inflation.

Can I make a one off lump sum payment into any schemes?

Most pension plans allow ad hoc payments.

Or should I look for a Private Pension scheme?

If you want to do an ad hoc payment in addition to the regular via next then that may well need to be the case.

GemQuin

Hi and thanks.

OK - this may sound stupid but how do I know what I need in my retirement - is there an average sum that people usually aim for in retirement?

So, you think I should contribute to NEST and then also set up a Private Pension which I can contribute to on an ad hoc basis? Can you not contribute to the Nest scheme?

Is NEST actually a good pension scheme at all - is it competitive?

Thanks again.

dunstonh

OK - this may sound stupid but how do I know what I need in my retirement - is there an average sum that people usually aim for in retirement?

It requires you to calculate what you want based on your living standards and expectations. You can either do this yourself or use an IFA.

So, you think I should contribute to NEST and then also set up a Private Pension which I can contribute to on an ad hoc basis? Can you not contribute to the Nest scheme?

As an IFA I cannot give such an opinion as the regulator considers internet forums the same as face to face conversation. It is certainly an option available to you but it is not possible for us to say whether it is the best option for lump sums. (you can do lump sums into NEST).

Is NEST actually a good pension scheme at all - is it competitive?

If you benchmark it against other pensions then it would be difficult to call it good. it is cheap annually but has initial charges. It has a dire investment choice but one designed to keep it simple. You cannot consider it best but you wont make any mistakes with it.

Typically you would only use NEST if the employer adds contributions to it. If they dont then you would normally arrange your own pension with the features and options you want.

GemQuin

That's good to know. Thank you. x