Freelancer pension

molkocebo

Since leaving full-time paid employment 5 years ago for a freelancing career I haven't paid into a pension. And my old pension with Royal London was frozen and the pension advisor was removed from the account to avoid annual charges - there is around £66k in the pension.

Last year in 2018 this pension lost £1396 pounds due to bad financial performance, my question is which of the following should I do?

Leave the money where it is and hope 2019 has a better financial return.
Try and change where Royal London invests my money myself.
Pay an advisor yearly charges to manage the pension.

Or try one of the new internet pension providers and let them manage the money and give me more control of the investments. They will of course take annual charges. Does anyone have any reviews of these companies, like PensionBee etc.

Many thanks in advance
Chris

Marcon

molkocebo wrote: »

Last year in 2018 this pension lost £1396 pounds due to bad financial performance, my question is which of the following should I do?

Leave the money where it is and hope 2019 has a better financial return.
Try and change where Royal London invests my money myself.
Pay an advisor yearly charges to manage the pension.

A loss of around 2% of the total value, taking into account the charges which will be payable on the fund (you still pay them, even without financial advice), is hardly 'bad financial performance' given how the market slithered last year, especially in the last quarter. Many people took a % hit in double figures on their investments.

xylophone

Since leaving full-time paid employment 5 years ago for a freelancing career I haven't paid into a pension.

It could be a good idea to start paying into a pension again?


Have you checked your state pension position?

https://www.gov.uk/check-state-pension

Last year in 2018 this pension lost £1396 pounds due to bad financial performance,

Changing pension provider will not automatically improve performance.

Any invested DC pension will be subject to market conditions.

Are you able to resume contributions to the RL pension if you wish?

If you don't like this idea, you could transfer your pension elsewhere - you have various options including a SIPP.

You would need to educate yourself on pensions and investments before taking this step.

Below some reading to begin with.

https://monevator.com/find-the-best-online-broker/

https://monevator.com/category/investing/passive-investing-investing/

https://www.amazon.co.uk/DIY-Pensions-Simple-Retirement-Planning-ebook/dp/B00B7QN8XM

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

You could take advice from an Independent (check! ) Financial Adviser.

https://directory.moneyadviceservice.org.uk/en

dunstonh

Since leaving full-time paid employment 5 years ago for a freelancing career I haven't paid into a pension. And my old pension with Royal London was frozen and the pension advisor was removed from the account to avoid annual charges - there is around £66k in the pension.

It wont be frozen. Royal London do not offer any type of pension to consumers that can be frozen.

Removing the adviser from the agency, does not mean that charges are reduced. It depends on the age of the plan but plans from before around 2005 would see Royal London keeping the charge for themselves. Assuming there was any renewal commission in the first place (usually there is not).

Last year in 2018 this pension lost £1396 pounds due to bad financial performance, my question is which of the following should I do?

A negative year doesnt mean it is bad performance.

Leave the money where it is and hope 2019 has a better financial return.

What did you do in all the other periods that were negative?

Try and change where Royal London invests my money myself.

its an option. Do you know what you are doing?

Or try one of the new internet pension providers and let them manage the money and give me more control of the investments.

They are not advisers. They cannot pick the funds for you. What these tend to have are pre-built portfolios covering a small risk range. You pick the risk level and their computer invests on that basis. They are not really managing the money and you have absolutely no control apart from the risk level.

Does anyone have any reviews of these companies, like PensionBee etc.

Your RL pension is probably better and cheaper.

You could do well to learn a bit about investing if you do not plan to use an adviser. Otherwise you are going to make some mistakes. Some of which could cost you a lot of money.

lisyloo

You need to be putting money in.
£66k is not a lot when you split it over 30 years.
Not saying I’m perfect but I’m hoping for £700k min to give me £28k per year. I’m not saying that’s a benchmark but just to give you an idea that you need a much larger pot if you want a comfy retirement.

Learning investing is a big job. Some enjoy it others don’t.
I choose to pay an advisor to manage mine.
Another option is just to go for an off the shelf portfolio of fund.
There are a number of funds that contain mixed assets that you can match to your risk appetite.
You may find many on here who support DIY but it’s a big a job.
Imagine if you wanted to replace a roof or service a car engine.
You would want to practice with real money.

Marcon

lisyloo wrote: »

Not saying I’m perfect but I’m hoping for £700k min to give me £28k per year. I’m not saying that’s a benchmark but just to give you an idea that you need a much larger pot if you want a comfy retirement.

Doesn't that rather depend on current earnings and lifestyle? Many freelancers would love to be earning £28K (gross) a year, never mind retiring with that sort of income! Take into account the state pension and OP could be halfway there. Having said all that, completely agree with the sentiment that paying in some more, if OP can afford it, would probably be an excellent idea.

lisyloo

Marcon wrote: »

Doesn't that rather depend on current earnings and lifestyle? Many freelancers would love to be earning £28K (gross) a year, never mind retiring with that sort of income! Take into account the state pension and OP could be halfway there. Having said all that, completely agree with the sentiment that paying in some more, if OP can afford it, would probably be an excellent idea.

Yes of course it does depend.
I said it wasn’t a bench mark but more to give a ballpark to be comfortable.
£66k is barely going to provide £3k worth of income per anum (I use 4% myself but some say it should be even more conservative).

State pension doesn’t kick in until 65-68, but not sure how you get halfway. It’s between £8k - £9k per annum so subsistence only.

xylophone

barely going to provide £3k worth of income per anum

Where the sun don't shine?:eek:

lisyloo

xylophone wrote: »

Where the sun don't shine?:eek:

Sorry I don’t understand the comment.
I used 4% and some say that’s not conservative enough.

xylophone

Sorry I don’t understand the comment.

Look carefully at the quoted section in post above.

https://medical-dictionary.thefreedictionary.com/per+anum