Personal Pensions - Confused!

dontpanick

Hi there,

This is my first time posting on MSE - I'd really appreciate some advice from your good selves

I'm 34 and have always enrolled in Employers' pension schemes. To date I have 3.

I recently started a new job and my employer does not offer a workplace pension scheme at the moment. instead they make contributions to your own personal pension. (its very small company and everyone in the company already has theirs set up). They have said, with the deadline for auto pension enrollment coming up they can set me up with the standard govenrment one - NEST but that it is inflexible and not a great deal so I should sort one out that meets my personal needs..

Any advise on the best personal pension options for me? My current research has led me down a rabbit warren of confusing information. I'm aware of SIPPS but i'm wary as I'm not investment savvy. Any other options? I would potentially be looking to consolidate my other pensions into this new one - is that a good idea?

dunstonh

they can set me up with the standard govenrment one - NEST

There is no standard Government one. The Government set the rules for auto-enrolment but they do not manage any schemes. NEST does receive funding from the taxpayer and makes a very good job of losing money.

but that it is inflexible and not a great deal so I should sort one out that meets my personal needs..

With a small employer, you are not going to get a decent scheme. Small values, small premiums typically suited to inexperienced investors with low pension/investment knowledge. There isnt the economies of scale or volumes to offer all the bells and whistles.

I would potentially be looking to consolidate my other pensions into this new one - is that a good idea?

Probably not.

dontpanick

Thanks for your response

Yes, I get the impression they are reluctant to set up a NEST one which is fine by me if it is a bad deal.


Could you say why you don't think it would be a good idea to consolidate my other pensions?

dunstonh

Could you say why you don't think it would be a good idea to consolidate my other pensions?

The basic schemes that are likely to be used by your employer mean that an individual scheme is likely be be the better option or even leaving them where they are (or part consolidation). A lot of people have an individual scheme and a workplace scheme and then consolidate into the individual when they leave that employer.

dontpanick

Oops, there seems to be some confusion here - perhaps i'm not using the right terminology

My new employer has no intention of setting up a scheme. They have asked me to set up my own (individual scheme) and I am unsure of how to go about this or which ones to go for.

I would then perhaps try to consolidate my old workplace schemes into the new individual scheme so they are easier to manage.

AnotherJoe

Just google 'best SIPP providers". I suggest Hargreaves Lansdown, they are cheap at the lower end of the market and easy to deal with and very efficient, but there are many others as the 'best buy' guides you will find online will show.

dunstonh

My new employer has no intention of setting up a scheme. They have asked me to set up my own (individual scheme) and I am unsure of how to go about this or which ones to go for.

That means your employer would be breaking the law and subject to fines/legal action.

dontpanick

Yes a SIPP sounds like the way forward. I'm just wary of needing to manage my own investment funds.Will investigate.

dontpanick

dunstonh wrote: »

That means your employer would be breaking the law and subject to fines/legal action.

Well no, they would enroll me on NEST if I was unable/unwilling to set up my own individual scheme

dunstonh

dontpanick wrote: »

Well no, they would enroll me on NEST if I was unable/unwilling to set up my own individual scheme

That would make you an opt out and many providers will not accept applications from opt outs without an adviser signing off on it.

Plus, it would still need the workplace scheme set up, a contribution paid and then you opt out. So, if you are going to go through all that, you may as well stick with the workplace scheme.

xylophone

Your employer must set up a scheme. He doesn't have a choice.

http://www.thepensionsregulator.gov.uk/en/employers

I suggest you show him the above.

The pension does not have to be NEST.

Has the employer looked at NOW or THE PEOPLE'S PENSION?

http://www.nowpensions.com/press-release/now-pensions-announces-enhanced-service-and-confirms-monthly-employer-service-charge/

https://thepeoplespension.co.uk/for-small-business/employers/