Employed to Self Employed pension contributions

chelseablue

My husband up until last month was an employee, enrolled in the company pension scheme with Standard Life 
Due to redundancy he has taken a job where he is now classed as self employed, so no more company pension! 
Standard Life have written to him to say he can still make contributions to his pot with them which we are keen to do of course
My question is how much of his income should we put in? 
He gets paid every 2 weeks now so I thought when he gets paid straight away put 10% of his take home pay in his pension, unless I'm missing something? 
He's 31 and pays 20% tax (he's in the Construction Industry Scheme tax group) 

Brynsam

There's no magic number, however much people will trot one out. Make sure you have an easily accessible rainy day fund (especially now he is self employed so won't qualify for sick pay, holiday pay etc), then save as much as you realistically can as early as you can, to give the fund time to build up.

Albermarle

Even though he will not get any employer contribution any more he will still get tax relief on his contributions. SL should add this automatically .
It will be worthwhile to investigate what actual funds the money is invested in within the pension ( if you have not already done so of course ) Someone at his age has a long time to remain invested so should be in a relatively high risk fund as this will give the best return in the long run.
By the way there would be nothing to stop you opening a new pension and contributing to that instead of SL pension . You could leave the SL pension to hopefully grow or transfer it into your new pension. I am not saying you should do any of that but just pointing out possibilities . Obviously it is easier just to continue with SL of course.

chelseablue

Thank you, its currently invested in Standard Life Managed Pension Fund 4Balanced II Universal. 
Percentage charge before discount 1.03% (Last year he was charged 0.64% of the plans value. Is this good?) 
The risk level of the fund is 4, their highest is 7

Im thinking 4 is to low a risk for a 31 year old with 30+ years to go. Would you move it to a risk level of 6 or 7?

garmeg

chelseablue said:

Thank you, its currently invested in Standard Life Managed Pension Fund 4Balanced II Universal. 
Percentage charge before discount 1.03% (Last year he was charged 0.64% of the plans value. Is this good?) 
The risk level of the fund is 4, their highest is 7

Im thinking 4 is to low a risk for a 31 year old with 30+ years to go. Would you move it to a risk level of 6 or 7?

With 30+ years to go, absolutely yes!

Albermarle

Is this the fund ?
https://lib.standardlife.com/library/customer/invsum_4bal.pdf
If so it is 70% equities which is reasonably high . However at age 30 you should go higher still.
On the other hand its performance is not great , probably due to being too heavily weighted to the UK . I find generally SL pension funds are not great performers .
Maybe he could have a look at what other funds are available with a bit less bias towards UK and maybe a higher equity content. .

chelseablue

Yes that looks like it  
My pension is with Legal & General and always found them to do pretty well
Are they good for self employed pensions?