Help! Total pension novice

anmadogo

Hello, I have recently become self employed (working as a builders labourer) after a 10 years working for the NHS. I have very little money to spare but am concerned that I need to sort out paying into a pension. The problem is I'm finding it a bit of a minefield! Any advice on what options would be available to me would be fantastic. A colleague suggested NEST?? and someone else mentioned interactive investor but I am imagining their income is significantly higher than me!
Many thanks in advance, Annie

stehouk

More information will be needed for people to give you advice eg: wage, outgoings, savings, emergency fund, if you don't have much money to spare then a pension at this point may cause you difficulties because you don't have access to the money until 55yrs old.
Savings and or an emergency fund would be my priority at this time, and then look at funding a pension when these are in place.

xylophone

after a 10 years working for the NHS.

You have a deferred Defined Benefit Pension from the NHS scheme?

Are you self employed or employed by your own limited company?

https://effective-accounting.co.uk/blog/how-beneficial-is-making-pension-contributions-through-a-limited-company/

At the simplest level, you could consider a stakeholder.

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

Have you obtained a state pension statement?

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

Andrew31

Agree with stehouk, emergency fund should be first priority.

anmadogo

Thanks for all your replies. I am self employed and registered with CIS so 20% is deducted. I work 4-5 days a week at £10 per hour before deductions. I try to keep living costs low so aim to have £500 left over each month. I have about £6000 in savings and having googled 'deferred nhs pension', I'm pretty sure I have one (if this means I have an nhs pension but no longer pay into it) i hope this info makes things clearer... Thanks so much!

Albermarle

OK a pension is a good way to save for retirement , specifically because you get tax relief added. You will probably pay some tax on income from the pension when you take it, but it is less than the added tax relief.
For example , if you add £300 to a pension then the pension provider will automatically claim back £75 from the taxman and add it to your pension fund.
The disadvantage of a pension is that you can not access the money before you are 55( currently but this age will rise in future ) I do not think you have said how old you are ?

The stakeholder pension suggested by Xylophone is a relatively low cost and simple product . Follow the link provided and see what you think .
Also follow the link to check your state pension position. It should be OK but worth checking .

Finally when you left the NHS you should have had some pension paperwork ? Keep it safe and always inform them if you change address.

anmadogo

Thanks Albermarle, Yes sorry, I forgot to include my age...I'm 39. Yes, i have got some nhs paperwork, so I will look over that in more detail. And i'll check my state pension too, thanks. So, in your opinion the cavendish option is the one for me? - Should I forget about nest in that case?
Thanks

Alexland

Have you considered a S&S Lifetime ISA? It would offer the same 25% uplift but with no tax to pay on withdrawal from age 60? You must be under 40 to open the account and can contribute until 50 after which a pension might be your next best option.

Alex

xylophone

Compare one with the other.

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

https://www.nestpensions.org.uk/schemeweb/nest/members/my-nest-pension/joining-nest/joining-as-self-employed.html

https://www.nestpensions.org.uk/schemeweb/nest/aboutnest/nest-charges.html

AlanP_2

Alexland wrote: »

Have you considered a S&S Lifetime ISA? It would offer the same 25% uplift but with no tax to pay on withdrawal from age 60? You must be under 40 to open the account and can contribute until 50 after which a pension might be your next best option.

Alex

OP - Open a LISA before age 40 whether you use it much or not.

Gives you another option as Alexland suggested and could be used in addition to a pension or as an alternative.

cns06

Something that's often overlooked is people in the trades will often suffer from poor health from quite a young age due to the toll the physical job will take on your body. So take that into account when considering a SIPP or "worse" (IMHO) LISA because both products might tie you in till you are getting on for 60 (or 60 in the case of the LISA).

I would seriously consider a S&S ISA instead just for the flexibility it would offer.

Not saying thats what to do but just think it over. I speak from experiance.