self emplyed pensions options?

cyclops

i have just gone self employed (driving instructor)
and would like some pensions advise
i used to work for the local council so have 15 years of the pension from there
so where to now?

any advise welcome
thanks

Debt_Free_Chick

Your only option is a Stakeholder pension. Or a variant ... the self invested personal pension (SIPP). A SIPP requires careful attention to the way that your contributions are invested. You have complete control .. but it's in your power to fail miserably, if you make the wrong decisions or don't have sufficient knowledge.

Do you need more information on Stakeholder pensions or SIPPs?

(I assume you were looking for a conventional pension plan, rather than other methods of saving to provide an income in retirement)

Pal

Or a Personal Pension policy...

Debt_Free_Chick

Pal wrote:

Or a Personal Pension policy...

Isn't that just a Stakeholder with higher charges?

dunstonh

Debt_Free_Chick wrote:

Isn't that just a Stakeholder with higher charges?

No.

They are the same thing from a working point of view. The only difference is that the stakeholder pension has a certain charging method which cannot be breached. A personal pension has a more flexible charging method with no rules on the maxium.

A personal pension can be cheaper than a stakeholder pension. Particulary for those with 20 or more years to go until retirment. For example, I can arrange a personal pension, taking full commission entitlement use a range of external funds and come out with a reduction in yield to 6.3%. Yet, had I used a stakeholder pension and invested in (more limited) fund options, I would generally come out with a reduction in yield between 5.7% (on post April 2005) stakeholders to 6.0% (or pre April 2005) Stakeholders. The personal pension has lower charges to the tune of 0.4% a year on average.

That is one example of a PPP being cheaper, they can also be more expensive. The popular Skandia PPP is great for those with more than 75k in their fund and 19 years or more to go. If you only have 10k, you would find a stakeholder cheaper.

So, in summary, a stakeholder pension may be cheaper, it may be more expensive.

EdInvestor

You might be better to max out your cash and shares ISAs for the time being. Next year the rules on pensions are changing so that they don't any more havee the "use it or lose it" earnings rules which meant if you didn;t make a contribution every year you lost the opportunity forever.

Instead you'll be able to contribute up to 215k a year (!) for a lifetime overall limit of 1.8m.This means you can save in other ways and then sweep the money into the pension later to get the tax relief. Makes it more flexible, as the money won't be locked up in case you need it for emergencies.

Make sure you don't go bankrupt though,as pension money is protected, while ISAs aren't.

PS Voluntary NI contributions to keep up your right to the (index linked)state pension are a real bargain at only 8 quid a month for the self employed :)A "best buy", IMHO.

cyclops

can anyone reccomend some companies for the suggestions above?
web sites if possible

oceanblue_3

I'm an IFA, and I would recommend that you consult an IFA..........look at it this way: this website is great for sharing information about relatively simple finanacial products like Cash ISA's, Credit Cards, Personal Loans, etc, but your pension is meant to replace your (self) employment as your principal source of income once you have retired - would you take advice, and then make big decisions about your career, from people you have never met? Nevetheless, because IFA's like to help people.........in my opinion, the best SIPP product is *********, the best Personal Pension Plan is probably *********** (expecially if you want additional Waiver of Premium Benefit), and the best Stakeholder Pension is provided by ************ (some excellent funds at 1% annual management charge).

<EDIT BY PAL TO REMOVE DISCUSSIONS OF SPECIFIC FSA REGULATED PRODUCTS. UNFORTUNATELY WHILE THE OPINIONS GIVEN WERE OBVIOUSLY THE POSTERS, AND THE COMMENTS MAY HAVE BEEN PERFECTLY FINE, THIS SITE IS NOT WILLING TO RISK FALLING FOUL OF THE FINANCIAL SERVICES REGULATIONS.>

EdInvestor

Try https://www.sippdeal.co.uk for a SIPP, much cheaper than Standard life.The site has a good explanation of what they are and you can see the charges clearly for each type of investment ( funds,shares etc). No annual fee.:)

Info on class 2 NICs for self employed

dunstonh

the best Personal Pension Plan is probably *********** (expecially if you want additional Waiver of Premium Benefit)

I have yet to do a Scot Eq FPP. That is despite doing over 250 pension cases last year. Yes, it usually appears high up the list as the cheapest option but I just find the high early transfer penalties off putting. If you are the sort of person that is likely to stick to the same provider until retirement, then they are certainly one of the cheapest around if you have approx more 20 years to do. Speaking of waiver, Friends Prov is another that is pretty good too. Their low risk fund range is quite good too.

Oceanblue, it may just be worth you adding a disclosure signature like mine below. Most of the FSA registered members of the board carry a similar message. It's just to make sure that people realise that you are posting for discussion and not advice and cannot hold it against you later on.

As for SIPPS, we should be careful not to confuse the OP to the point of doing nothing. SIPPs are ideal for those that want to take full investment control and have a larger range of investment options than those available on a personal pension or stakeholder pension. SIPPs are usually more expensive than stakeholders/Personal pensions with smaller fund values.

cyclops

i actually use friends provident for life assurance policy (had it since i was 18 now 32)
basically what i want to do (i think?) is be secure in my retirment and i dont want to have to think hard about what i need to do for this (what i mean by this is id like the company i go with do all the hard work to get it right for me {if this makes sense})

thanks all for the advise all keep it coming (i need it) and i wont hold any one responsible i will make my own judgment from advise given
again thanks