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Self employed questions

Theogirl_2
Posts: 64 Forumite

Hi, I hope someone can advise me
My DH has recently started to work for a company who pay him gross on a monthly basis (from another eu country). He has contacted the tax office (we always did self assessment as we have had second jobs in the past) and they will sort out his new arrangements for tax and NI.
He used to get a company pension (as do I) and we both have/had some death in service benefit tied to this.
So things we need to sort out, a pension for DH. I have read Martins posts and the Which book, how to be your own financial advisor and we think we know how much to put aside for this. What seems to be clear and please forgive my ignorance is that you cannot buy a pension "off the peg" as it were and we will need to take advice. Is this correct?
How do we pick a pensions advisor? Are there any special quailfications to look out for?
We also need to get new life cover? Should we buy this cheaply on the net?
We have a child, should we be looking at critical illness cover? It seems very expensive. My work has generous sick leave policy.
Hope that this isn't too long. Any tips welcome.
My DH has recently started to work for a company who pay him gross on a monthly basis (from another eu country). He has contacted the tax office (we always did self assessment as we have had second jobs in the past) and they will sort out his new arrangements for tax and NI.
He used to get a company pension (as do I) and we both have/had some death in service benefit tied to this.
So things we need to sort out, a pension for DH. I have read Martins posts and the Which book, how to be your own financial advisor and we think we know how much to put aside for this. What seems to be clear and please forgive my ignorance is that you cannot buy a pension "off the peg" as it were and we will need to take advice. Is this correct?
How do we pick a pensions advisor? Are there any special quailfications to look out for?
We also need to get new life cover? Should we buy this cheaply on the net?
We have a child, should we be looking at critical illness cover? It seems very expensive. My work has generous sick leave policy.
Hope that this isn't too long. Any tips welcome.
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Comments
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H What seems to be clear and please forgive my ignorance is that you cannot buy a pension "off the peg" as it were and we will need to take advice. Is this correct?
No.You can go direct.But it is better to go via a discount broker who will rebate the charges, such as www.h-l.co.uk or www.cavendishonline.co.uk
You may wish to have a look at SIPPs, which provide the best access to quality funds.Look for ones with no annual fee, which cost much the same as ordinary pensions.We also need to get new life cover? Should we buy this cheaply on the net?Trying to keep it simple...0 -
Oh, other things to add are that we have an emergency fund saved in mini cash isas, contribute to our childs CTF and don't use the equity isa allowance yet.
Would a stakeholder be a suitable product for him?
Thanks0 -
Is he likely to be a UK high rate taxpayer? If there is no employer money the only point in pensions is the tax relief - and basic rate taxpayers get little advantage as the pension income is taxed at retirement and thus they have to pay it all back (excepot the 25% lump sum).Trying to keep it simple...0
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Look for ones with no annual fee, which cost much the same as ordinary pensions.
I can feel another row :mad: brewing !!!!'In nature, there are neither rewards nor punishments - there are Consequences.'0 -
What seems to be clear and please forgive my ignorance is that you cannot buy a pension "off the peg" as it were and we will need to take advice. Is this correct?
You can buy many direct but there is usually no reason to do so as the charges are the same (or even more) than what an IFA can do for you. If you dont want advice, then you can approach an IFA or use an IFA with a website to buy the pension on execution only basis a bit cheaper than full advice basis. You dont get any FOS protection as you are taking on that responsibility. Some people dont want advice or protection though so thats fine.How do we pick a pensions advisor? Are there any special quailfications to look out for?
There are no special qualifications required above the normal as its simple business. Independents should be chosen and not tied agents and if the amounts are going to be high enough, then one with decent investment experience should be taken. After all, a pension is just the tax wrapper. Its where the money is invested that will be the biggest impact on returns.We also need to get new life cover? Should we buy this cheaply on the net?
If you know what you are doing and what you need, then may as well.You may wish to have a look at SIPPs, which provide the best access to quality funds.Look for ones with no annual fee, which cost much the same as ordinary pensions.
SIPPs are experienced investor products and despite Eds lies, they cost far more than ordinary pensions when investing in funds. One assumes you will use funds as you wouldn't be asking these questions if you knew what to do. Even the cheapest SIPPs can be more than twice the cost of a personal pension or stakeholder pension.Would a stakeholder be a suitable product for him?
With the questions you are asking, it sounds like you need advice. I would take Eds comments with a pinch of salt at this stage because you dont enter into a SIPP without knowing what you are doing and where you want to invest. That is a recipe for making a mistake and paying more for it.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
SIPPs are experienced investor products and despite Eds lies, they cost far more than ordinary pensions when investing in funds.
By contrast a stakeholder pension will normally only offer you a bog standard selection (albeit at a slightly lower cost).A personal pension will these days offer you a small selection of decent funds, but often at a higher fee than that charged by a DIY low cost online SIPP where you can pick from the whole lot.
Choosing which funds to invest in is not hard if you look at some of the sites which rate the funds' performance, such as
www.citywire.co.uk/Funds/Home.asp
It's not particularly obvious that IFAs are all that much better than you and me in choosing quality funds. This is probably because it's not rocket science: once you've eliminated all but the top 10 performing funds in your chosen categories and checked them out for consistency, it is pretty easy to see which ones are the winners.
[BTW dunstonh I would appreciate it if you desist from suggesting I am telling lies.This is against the house rules AFAIK, see Forum Etiquette top of the column over there ------------>>>>>>>]Trying to keep it simple...0 -
Thanks for all your advice. It's difficult for us as we have had this taken care of before
In answer to a couple of the points raised. I think DH will become a borderline higher rate tax payer. So if I'm right a pension is also a useful way to bring him to the 20% threshold. I may have made a mistake on this though and it might not work this way.
We would be looking to put approx 450 quid away a month (pos a bit less, I haven't taken our existing pensions fully into account with my calculations so far). I don't know if financial advisors regularly deal in these amounts or he will think we are wasting his time.
Thanks for all your help, all advice is welcome0
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