Making new pension arrangements

RMR

Good morning,

I’ve been in an employers pension scheme for around 30 years, ever since I left school. My earnings have never been particularly high but my employers pension together with my state pension will be enough for me to live on.

I’m now self employed and can afford to pay a small amount into a pension arrangement, which I know would be tax efficient, but I simply don’t know where to start. I’ve tried reading up on the different schemes available, charges and financial advisers but there is just so much conflicting information out there.

Any pointers in the right direction would be gratefully received.

Thank you

RMR

Albermarle

You do not need a financial advisor to start up a pension scheme , especially if the sums involved are small.
If you are not very knowledgeable about investments etc , I suggest you try the websites of a couple of household names like Standard Life or Aviva . They have 'easy' options where you only have to pick one of four risk levels . They might not be the cheapest in terms of charges but you can worry about that when you have built up a bigger fund .

xylophone

You might consider a simple stakeholder which suits modest contributions.

https://www.cavendishonline.co.uk/stakeholder-pension

Have you obtained a state pension forecast?

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

OldMusicGuy

It's worth having a read of this book: DIY Pensions: A Simple Guide to Pensions, SIPPs & Retirement Planning, by John Edwards.

fronty

If you don't want the hassle, just want something easy, you could just start squirrelling some money away into an ISA - there's pro and cons and you can probably argue forever about which is better, obviously you won't get tax relief on your contributions but it'll be tax free when you withdraw it. You could always invest it in a pension later on if you wanted and claim the tax relief then.

Albermarle

If you don't want the hassle, just want something easy, you could just start squirrelling some money away into an ISA

There is more than one type of ISA.
A cash ISA is simpler but with low returns . A stocks and shares ISA should hopefully give better returns in the long terms (> 5 years ). However in the latter case you still have to pick investment funds so not much different from a pension in that respect . Apart from the fact it is less tax efficient than a pension , although you can access an ISA before age 55.

You could always invest it in a pension later on if you wanted and claim the tax relief then.

You can only do this , if you will pay sufficient amount of income tax in the year that you put the money in the pension.

RMR

Thank you all, much appreciated. I will have a look at the suggestions and have a think. I've got a state pension forecast and I also have an ISA, so was really thinking of carrying on with a pension in some way. Thank you for taking the time to reply. RMR.