Pensions - private/personal

flashsnaps

Hi all,


I am desperate to start paying into a pension. The company I work for are not due to enrol on the workplace pension scheme until 2017/2018.


When googling private pensions I don't seem to be spoilt for choice. e.g. Aviva and Virgin are the only obvious ones that come up.


Are private pensions risky? and why is there not much choice?


Any recommendations on this?

AnotherJoe

Google SIPP

atush

HL, Cavendish online

zagfles

You can have a SIPP (self invested personal pension) and then you choose what it's invested in, so the risk depends on your investment choice. It's similar to a S&S ISA except it's a pension and so the tax treatment/access rules are different. But the underlying investments can be the same.

SIPP provider's charges vary - google "snowmans spreadsheet" for a very useful comparison tool.

Or a personal pension/stakeholder - these are often cheaper via intermediaries, eg an IFA, but then they'll want a fee too. Cavendish do an "execution only" service for a small fee, see http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/

Check reviews too, including searching this board, some providers have had admin problems (both pension providers and SIPP platforms).

If you want an IFA, search for a local one on http://www.unbiased.co.uk but shop around, their charges vary a lot.

dunstonh

Are private pensions risky? and why is there not much choice?

There is no such product as a private pension. That is why you are finding low responses.

It is a term that some people use to differentiate between workplace pensions and that collection of types used for individuals.

For you, you would be looking at:
Stakeholder pension
Personal pension
SIPP
S&S ISA

Any recommendations on this?

That would be a regulated activity and the board isnt allowed to do that. Discussion is fine though.

Generically, Stakeholders are the simplest option. Created in 2001 to be a basic, low cost option. it has a cap on charges with limited fund selections with full FSCS protection. Less chance to make a mess with one of these. However, since 2001, they have become less relevant as the other options have become cheaper and more flexible. Stakeholder pensions dont offer many of the new pension freedom options.

Personal pensions are the middle ground. Can be cheaper than stakeholder pensions (using the same internal funds) or more expensive if you use external funds. Tend to offer all the modern options. Full FSCS protection

SIPPs are, generically, the most expensive option. However, it is possible to get low cost if you select the right provider and the certain investments. Full whole of market investment options. It is really geared for the experienced investor. Limited FSCS protection.

S&S ISA is not a pension but is frequently used in retirement planning. I include it as you may wish to run it alongside the workplace scheme or even transfer it into the workplace scheme (which would be a two step process).

kidmugsy

Our SIPPs are with Hargreaves Lamsdown ("HL"). We find their service excellent, and their charges are OK for modest sums (ours are both far below the £40-£50k mark where you might feel like transferring to someone else).

We don't use them for ISAs, though; we think they are a bit expensive there.

If you could be patient, you could wait for next tax year when LISAs will be available to the under-forties: until then there are regular saver accounts that pay 4% - 6% p.a.