Self Employed couple with no pension

sophbuck

As the title suggests we are in our mid thirties, both self employed and without pensions! I'm a basic rate tax payer and my husband is a higher rate tax payer. We do not own a property. We have some savings in ISA's/help2buy isas and that's about it. We have no understanding of investments. We are hoping to put around £200 each into a pension a month.

I was having a look at the pensions with Cavendish. Would this be the best route for us?

Thanks for your advice.

dunstonh

We are hoping to put around £200 each into a pension a month.

its a start but a bit low for a couple starting retirement planning late.

I was having a look at the pensions with Cavendish. Would this be the best route for us?

Is that the Cavendish SIPP (which is a white labelled version of Fidelity's SIPP with less functionality and just as bad website) or Cavendish acting as a seller of other peoples pensions? (they do both)

Brynsam

sophbuck wrote: »

We do not own a property. We have some savings in ISA's/help2buy isas and that's about it. We have no understanding of investments. We are hoping to put around £200 each into a pension a month.

Why? If you are trying to save for a property, maybe putting all your eggs into that basket for a while to try and make it a reality might be a better option, especially for you as you are a basic rate taxpayer. Your husband would fare better in terms of tax relief on a pension because he is a higher rate taxpayer, but saving in a pension won't help you onto the housing ladder, which is presumably why you have your help2buy ISA.

Having to pay rent for the rest of your life is an expensive option - and who knows if housing benefit will be around to help you? I can hear the clamour about 'who knows what the state pension will be like' - I don't know either, so it isn't a simple choice!

Simple_Man

Brynsam wrote: »

Why? If you are trying to save for a property, maybe putting all your eggs into that basket for a while to try and make it a reality might be a better option, especially for you as you are a basic rate taxpayer. Your husband would fare better in terms of tax relief on a pension because he is a higher rate taxpayer, but saving in a pension won't help you onto the housing ladder, which is presumably why you have your help2buy ISA.

Having to pay rent for the rest of your life is an expensive option - and who knows if housing benefit will be around to help you? I can hear the clamour about 'who knows what the state pension will be like' - I don't know either, so it isn't a simple choice!

I was going to say the same thing, being in the unfortunate position of retiring but not owning a property myself. If you aren't planning to DEFINITELY acquire a property,what do you think your monthly rental might be in 25 years time and as the guy above says, DWP could kill off hb at any time, look at what they've done to the state pension eligibility rules.

Pun

dunstonh wrote: »

its a start but a bit low for a couple starting retirement planning late.

Possibly their focus - as suggested by other posters - should be on buying a home and then worrying about retirement planning. The two shouldn't be mutually exclusive but sadly they often are.

kidmugsy

If you can afford it the best bet might be for your husband to contribute enough to a pension to escape higher rate tax, but no more, while you both save in H2B or LISAs. It might be worth seeing whether it's attractive to transfer part or all of your existing ISAs into LISAs. (If, that is, you have neither of you owned residential property before.)

I've googled "transfer from ISA into LISA" and it does seem to be possible.

BobQ

sophbuck wrote: »

As the title suggests we are in our mid thirties, both self employed and without pensions! I'm a basic rate tax payer and my husband is a higher rate tax payer. We do not own a property. We have some savings in ISA's/help2buy isas and that's about it. We have no understanding of investments. We are hoping to put around £200 each into a pension a month.

I was having a look at the pensions with Cavendish. Would this be the best route for us?

Thanks for your advice.

Whether you buy your home is a lifestyle choice but being 30+ and not funding a pension and not buying property is a poor decision.

All the time one of you can get such a good deal on pension tax relief its mad not to take it.

Pun

BobQ wrote: »

All the time one of you can get such a good deal on pension tax relief its mad not to take it.

Not if buying a home is a priority and OP is saving for a deposit and/or hoping to get a mortgage. It's about priorities, not tax relief.

mgdavid

Pun wrote: »

Not if buying a home is a priority and OP is saving for a deposit and/or hoping to get a mortgage. It's about priorities, not tax relief.

Priorities do not have to be, and are not, mutually exclusive.
At their stage of life and without either property or pension they need to do both in parallel in order to have some semblance of future to look forward to.

xylophone

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief

https://www.pensionbee.com/guides/download-self-employed-guide

https://forums.moneysavingexpert.com/discussion/5822297 see post 5.


https://www.moneysavingexpert.com/savings/lifetime-ISAs

Brynsam

mgdavid wrote: »

Priorities do not have to be, and are not, mutually exclusive.
At their stage of life and without either property or pension they need to do both in parallel in order to have some semblance of future to look forward to.

Not if they can't afford both - hence the need to prioritise.