Starting a pension from scratch & should we pay for an IFA?

excelwizard

Okay, as you'll be able to tell, this is my first time posting on this board

I'm 26 years old. My employer and I have been paying into my LGPS for the last two years. My contributions have been 5.8% and my employer 13.7%. This was my first pension and as of 1st April the charity I work for is being taken over by another one. The new provider have stated they will honour the 13.7% pension contributions but won't pay into the LGPS as they can't afford to be a member - they've advised me to tell them the pension provider I want to use going forward.

This has opened up the big can of worms of looking at personal pension providers and I feel slightly (more than slightly) overwhelmed with which provider to choose. My partner is self-employed, 25 years old and has no pension so we saw an IFA together this week. They've explained their charges and it would be up to £1200 between us (including £150/hour IFA rates).

My partner and I are scratching our heads about whether we need an IFA as both our pensions pots would be starting from £0 (I'm not transferring my LGPS pension) and we're effectively paying £1200 out before we've begun however the thought of taking on the responsibility of choosing a provider myself concerns me. Am I right in feeling that the fact we're complete novices mean that it's worth paying for someone else to take the reins? I've looked into the providers that do more 'robo investing' but even with those there's the issue of choice of funds even once I've picked a risk level.

I'm also aware that the type of pension I get will likely be different than my partner's as mine will need to accept employer contributions. Can any type of pension accept employer contributions?

Any general / specific advice considering the circumstances? If I've not provided enough information then do let me know and apologies for the general 'newbie' tone to the post

JoeCrystal

I would have thought that your new employer has the pension scheme you will be auto-enrolled into instead?

excelwizard

Hi JoeCrystal - The new service provider have various employees across Yorkshire in different pension schemes such as the people's pension trust, some of my colleagues are auto-enrolled into NEST and my manager has a personal pension that they will pay into etc. so there's a lot of variation. I actually, stupidly, opted out of the NEST pension as I had my LGPS and got the idea in my head that if I had the NEST one they'd stop paying into my LGPS. Looking back I actually don't know if that's true or not or whether they just would have paid into both. But what's gone is gone.

Would it be sensible to just opt back into NEST? Or should I take the opportunity to get a private pension..

Linton

excelwizard wrote: »

Hi JoeCrystal - The new service provider have various employees across Yorkshire in different pension schemes such as the people's pension trust, some of my colleagues are auto-enrolled into NEST and my manager has a personal pension that they will pay into etc. so there's a lot of variation. I actually, stupidly, opted out of the NEST pension as I had my LGPS and got the idea in my head that if I had the NEST one they'd stop paying into my LGPS. Looking back I actually don't know if that's true or not or whether they just would have paid into both. But what's gone is gone.

I thought you said that they would not pay into LGPS anyway?

Would it be sensible to just opt back into NEST? Or should I take the opportunity to get a private pension..

Yes, at this stage of your career and with your lack of experience I suggest you simply opt back into NEST. In a few years time you will be in a better position to judge whether a move elsewhere would be beneficial. It also avoids worrying about whether you need to talk to an IFA.