Self Employed Pension 40 y/o thinking of NEST?

P68696c

tacpot12 said:

NEST is certainly trustworthy, but the contribution charge is excessive, but you could open a SIPP with any number numbers of providers and pay less. NEST makes sense if your employer is contributing into your pension as their contribution more than covers the contribution charge, but if it is just yourself paying in, you are better off with a different provider. The NEST funds are ok.

I would recommend that you invest the money you put in your pension to avoid the loss of purchasing power caused by inflation, which will be substantial over 15-20 years. The value of your investments will change over time, but you can chose when you sell them - just don't sell them when the markets have crashed. 

£300/month is a good amount to start with, but you should try to increase this when you can. You should also check your state pension entitlement and make up any missing years while you can do so (there is a six year time limit).  

I'm very new to this and have been looking at Nest along with a few others. Of those, Nest is the only one which charge on deposits rather than just straight annual fees.

I did some calculations comparing Nest (1.8% on deposits; 0.3% p/a on balance) with Penfold (0.75% p/a on balance). Although the 1.8% sounds high (and is deducted before the tax relief is calculated), with the annual percentage balance fee being considerably lower they actually looked quite favourable. Although initially Penfold works out cheaper, at about 7 years in it switches.

My calculations did not include annual interest but for £1000 deposited every year for 25 years the total fees for Nest and Penfold came out as £1,619 and £2,872 respectively. With respective final balances of £29,519 and £28,378. Obviously it depends on the interest as to which would actually end up being best investment wise. Also, I'm sure Penfold are by no means the best comparison to Nest for most people. As a couple we are somewhat limited in our options: I am self employed and am looking at Nest. My partner is looking at Penfold  which seems to be the best contender for her as she is currently a stay-at-home carer for our daughter.

If anyone has any better suggestions than Penfold for where a stay-at-home carer (not employed and not registered as self employed, already got a LISA) could start to put a little aside in a pension scheme your input would be much appreciated.

Albermarle

To be honest I had never heard of Penfold . Looking at their website they are just another one of the breed of new pension providers , who offer simple pensions with an easy to understand website and app. You could also have a look at Nutmeg 
Your wife could start a pension with any number of pension providers , although some may have a minimum contribution level and prefer regular contributions . You could also look at Nutmeg or Wealthify or Legal and General SIPP .
For something a little more complicated but popular you could look at Vanguard SIPP.
Someone with no earned income can put a maximum of £2880 pa into a pension and this will be topped up with tax relief of £720 ( even though she pays no tax )