pension scheme for self employed (UK)

TheLittleSaver

Hi everyone

I am 32 and live in UK, registered as self employed. I have been working here for around 4 years (so hopefully I won't be kicked out after Brexit), but like a stupid I never thought properly about pension until now! So I would like to start doing something about it, without wasting more precious time.

I did a research, I know there are mainly three types of pension scheme:

- Personal pensions
- Stakeholder pensions
- Self-invested personal pensions (SIPPs)

And now the state pension is open to self employed as well.
So, as far as I could understand, a SIPP might need too much "effort" and knowledge to do it properly, managing the risk, etc... so perhaps for my situation the choice would be between a personal pension and a Stakeholder pension?
Also, I think I could/should start a state pension too? Or should I just keep saving my money, as I am already doing (as I always thought "I can put some money in another account each month, rather than putting that money in a pension scheme")?
What can you suggest me?
I would really appreciate any kind of suggestions you could possible give me, as this is a new territory for me and got a bit lost in all choices.

Thank you very much!

xylophone

You are registered for tax and National Insurance?

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/597485/NICs_fact_sheet_final_web.pdf

https://www.gov.uk/new-state-pension/eligibility

https://www.moneyadviceservice.org.uk/en/articles/pensions-for-the-self-employed

https://www.cavendishonline.co.uk/pensions/

ischofie1

I'd look at the personal pension route.

Horsin

Hi there

If this link works have a look at it/copy and paste it.

https://forums.moneysavingexpert.com/discussion/5614042

I've had some GREAT advice from members here following a similar theme. Good luck

TheLittleSaver

Thanks @Horsin!
I will read that as soon as I can.. although I must say I am still a bit confused about all these different choices available... anyway

@xylophone
sorry I thought I answred, but for some reason the answer didn't get through. Yes, I have a NINo (got it as soon as I moved to UK). Why? Would that mean that I am paying for saome "basic" pension by paying taxes?

@ischofie1
yeah I was thinking about a personal pension... but I am reading about so many people not very HAPPY about those... so now I am not sure if a personal pension would be the way to go, or maybe some other kind of investmen? I am still confused.

xylophone

Yes, I have a NINo (got it as soon as I moved to UK). Why? Would that mean that I am paying for saome "basic" pension by paying taxes?

Read the first two links in my post above.

TheLittleSaver

@xylophone

just did... so, if I undersstood correctly, I am entitled to the New State Pension and I don't need to do anything NOW, just claim it once I will reach the pension age? Is that correct?
If so, that would be amazing! But I still need another pension, as I guess the New State Pension alone won't be enough.

Also, how come you are suggesting "Cavendish Online FundSupermarket Pension"? Are you using it?
What's the advantage of join it, rather than using someone else?

xylophone

I am entitled to the New State Pension

Provided that you meet the contribution conditions as set out in the link.

Also, how come you are suggesting "Cavendish Online FundSupermarket Pension"? Are you using it?
What's the advantage of join it, rather than using someone else?

It was somewhere to consider for setting up your personal pension.

There are other providers!

TheLittleSaver

xylophone wrote: »

Provided that you meet the contribution conditions as set out in the link.

"You’ll be able to claim the new State Pension if you’re:

• a man born on or after 6 April 1951"

and

"You’ll need 35 qualifying years (on your National Insurance record ) to get the full new State Pension".

To me this means that I am entitled for the State Pension and I will be able to claim it in full after 35 years of working (and so paying taxes). Am I correct, or am I missing something?

xylophone

To me this means that I am entitled for the State Pension and I will be able to claim it in full after 35 years of working (and so paying taxes).

Read about National Insurance Contributions and "qualifying years" https://www.gov.uk/new-state-pension/your-national-insurance-record-and-your-state-pension

http://www.which.co.uk/money/pensions-and-retirement/state-pension/guides/your-state-pension-and-benefits/how-do-i-qualify-for-state-pension

Suffolk_lass

TheLittleSaver wrote: »

"You’ll be able to claim the new State Pension if you’re:

• a man born on or after 6 April 1951"

and

"You’ll need 35 qualifying years (on your National Insurance record ) to get the full new State Pension".

To me this means that I am entitled for the State Pension and I will be able to claim it in full after 35 years of working (and so paying taxes). Am I correct, or am I missing something?

There are two elements to claiming the new State Pension:

1. The number of qualifying years (i.e. the number of years you paid the minimum qualifying amount for it to count). If you are below the limit you can currently go back and pay for up to 6 years to make up gaps, if you want or need to)

2. State retirement age - this would currently be 67 for someone who is currently 32. However, the cost of providing the state pension and the number of people living longer (and therefore the cost to the government) are rising so age 67 is expected to rise before you get there.

Other things

Legislation in 2010 made the minimum date that people can draw from their private (non-state-provided) pension 55 (unless your scheme gives you a reserved right to another, lower age, normally 10 years before the scheme's normal pension age - this reserved right won't apply to you).

Most schemes are likely to align with state pension age if they are through an employer.

The advantages of paying in to an employee pension is that your employer contributes too

If you are attracted to a separate savings account there is a thing called a LISA (Lifetime Individual Savings Account) due to be introduced in April. It is for those in your age group (up to age 55) and you can pay in up to £4000 per tax year, to which the government will add up to £1000. It is intended for saving for one of two things - the deposit for a first time home-purchase or for retirement (currently age 60 to take the money without penalty).Mostly the providers of accounts on offer are cash at the moment but the Hargreaves Lansdowne Platform (website through which you buy your investments) is offering a shares based account.

There is a whole area on the Forum where you can talk about and learn about these things, and lots of expert posters to help explain things.