Cavendish online, Friends life, Stakeholder pension

Towser

I'm 47 self employed with no pension, and was thinking of applying for Cavendish online, Friends life, Stakeholder pension.

What do you think?

Better a pension than none.

Does Which still do best buy Stakeholder pension reports? I don't have access to Which any more. Can anyone tell me which is the best one?

jem16

Towser wrote: »

I'm 47 self employed with no pension, and was thinking of applying for Cavendish online, Friends life, Stakeholder pension.

What do you think?

Why a stakeholder? In most cases a Personal Pension would be better as it gives more choice. Stakeholders had their day when they were introduced as a lower cost pension with charges capped. Nowadays with newer pricing models on pensions they're becoming old hat.

How much were you planning on putting in each month?

Better a pension than none.

Yes but maybe get the choice right.

Does Which still do best buy Stakeholder pension reports? I don't have access to Which any more. Can anyone tell me which is the best one?

There is no Best Buy for pensions as it's down to individual circumstances as to what is better. You need to decide on what funds you would use and then find a pension and provider that offers what you want.

dunstonh

I'm 47 self employed with no pension,

Not good. Not terminal but its going to need some serious money going into it.

What do you think?

Stakeholders are largely a niche product nowadays. Aimed at small contributions or weird contribution methods. They are no longer the cheapest option. That is why there are so few stakeholder pensions offered nowadays.

Better a pension than none.

Something is better than nothing. However, how seriously are you actually taking this? Surely you are not just going to put a token amount in so you can tick a box and say you have done it.

Towser

Why a stakeholder?

No particular reason. Don't know that much about pensions. They were the best buy from Which in 1995 when my wife got hers.

How much were you planning on putting in each month?

£220 per month maybe more according to circumstances. Our house is our pension. We would have to move away from the SE when we retire.

serious money going into it.

How much will that be?

Should my wife change the Aviva Stakeholder pension to a Personal Pension then?

Can you recommend a Which Best Buy as I don't have access to Which anymore.

Thank-you so far.

dunstonh

Can you recommend a Which Best Buy as I don't have access to Which anymore.

No.
1 - Using Which on financial products is not a good idea (just ask anyone that used them for their best buy endowments)
2 - I'm regulated and cant give recommendations on the board
3 - you havent given enough to go on to decide which provider and investment will be most suitable.

How much will that be?

£220 is the sort of figure you can pay in your 30s. Not in your late 40s with no provision. What you need will depend on your overall scenaio but in isolation of those facts, £220 and self employed is not likely to be anywhere near enough.

Should my wife change the Aviva Stakeholder pension to a Personal Pension then?

Potentially, that could be a good option but it depends on what version stakeholder she has and the terms vs which personal pension she buys and the terms.

They were the best buy from Which in 1995 when my wife got hers.

Do you mean 2005 as stakeholders didnt exist in 1995. 2005 was about the time stakeholders started going off the boil and personal pensions were coming in with better pricing.

Our house is our pension. We would have to move away from the SE when we retire.

How much will that raise you? Downsizing or moving to cheaper areas tends not to result in as much money as people thought it would.

AlanP_2

Are you a Higher Rate or Basic Rate taxpayer?

If you pay £220 into a pension, the provider will reclaim BR tax for you so your gross payment into the pension per month will be £275 pm.

If you are a HR taxpayer you then need to reclaim an additional £55 pm tax relief from HMRC and as you are self employed this will probably be easiest via your end of year tax return.

So net, as a HR taxpayer, £275 into your pension actually costs you £165.

Do you operate via a Limited Company as there are potential tax advantages if that is the case?

At what age would you like to retire?

What is your wife's fund worth and is she still contributing to it?

Have you both asked for a State Pension Forecast?

Use the calculators at http://news.fool.co.uk/Your-Money/guides/How-To-Use-The-Calculators.aspx to get an idea of what the pension funds could grow to.

Historically broad equity / stock-market investments have returned ~5% more per year than inflation. Better to err on the side of caution so maybe use a growth rate of 3.5 or 4%, then if things go better you will be "up" and have more than you planned on.

Once you have a clearer picture of what you could expect at whatever age you target for retiring you can see how that compares to what you estimate your outgoings would be in retirement.

A fairly comprehensive, free, retirement planning tool can be found at https://www.retireeasy.co.uk so you may want to work your way through that to see how things might work out. A few people on here use it so if you have any questions come back and ask.

I'm not sure there is a "Which Best Buy" for pensions because as Dunston said everyone's situation is different.

In terms of which pension to go for have a look at the Personal Pension section on the Cavendish website and see what you think. Charges are reasonable at 0.25% of the "pot" value but you do need to choose what you invest in which can be daunting when you start.

For ideas on that have a look at the monevator.com website, there are a couple of starter posts listed on the right-hand side:

Investing for beginners: Why do we invest?

How to create a simple retirement plan


As said earlier you are starting later than many but at least you are going to start which is great, and anything is better than nothing.

Towser

Wifes pension was with Equitable life, then changed to Norwich Union then to Aviva so somewhere along the line it was changed to a Stakeholder pension pot around £17,000 and paying £220 a month. Has been approached by marketing companies so maybe the time is right to change to a better option.

How much will that raise you?

Maybe £300,000 in todays prices.

Hoping to inherit around £200,000 in todays prices too.

Towser

Basic Rate taxpayer

At what age would you like to retire?

67

What is your wife's fund worth and is she still contributing to it?

£17,000 and £220 a month.

Have you both asked for a State Pension Forecast?

no

Cavendish online, Personal Pension "Aegon" seems reasonable.