Pension dimwit needing advice

Edgylen81

Hi money saving experts
I was employed in the NHS for ten years and was enrolled in their pension scheme. I became self employed 2 years ago and joined up to Nest. I also have a lifetime ISA. Now my business is doing a bit better I have a bit of spare cash to invest for the future/ retirement. 

What is my best option? Do I stick with my nest pension or get a new one? Do I overpay my mortgage or get a stocks and shares ISA? Do I put all my spare money into a pension or have a “diverse” portfolio. I’ve literally never had spare money to invest. I’m worried about my retirement and really need to pick the best option to get the biggest bang for my buck. Thank you 

Dazed_and_C0nfused

Are you a higher rate taxpayer or basic rate?

What sort of amounts were you thinking of investing?

Marcon

Edgylen81 said:

Hi money saving experts
I was employed in the NHS for ten years and was enrolled in their pension scheme. I became self employed 2 years ago and joined up to Nest. I also have a lifetime ISA. Now my business is doing a bit better I have a bit of spare cash to invest for the future/ retirement. 

What is my best option? Do I stick with my nest pension or get a new one? Do I overpay my mortgage or get a stocks and shares ISA? Do I put all my spare money into a pension or have a “diverse” portfolio. I’ve literally never had spare money to invest. I’m worried about my retirement and really need to pick the best option to get the biggest bang for my buck. Thank you 

Start here: https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/self-employed-and-pensions/self-employed-and-pensions-help

MX5huggy

How old are you? Do you have an emergency fund? A pension can be “diverse” it’s just a wrapper around whatever you choose to invest in. Have you got the figures of how much the NHS pension will pay? 

Edgylen81

I don’t know how much my nhs pension will pay I need to contact them and find out. I am a basic tax payer and hitting the big 40 soon. I want to invest about £300- £400 a month. 

TVAS

You are self employed why not consider doing ad hoc single premiums i.e. a lump sum initially so you can swerve 40% tax. This is a good idea for you because when you do well in a particular month after putting the tax money aside you can shove in a lump sum. If you can do regular premiums as well why not.
  
How about half to pension and half to mortgage overpayment if your mortgage permits.

You have 10 yeas NHS so ask for a projection to the scheme normal retirement date.

I do not understand how you can have Nest and be self employed at the same time.

I would be minded to start a SIPP Vanguard or Nutmeg.  Good luck.

TVAS

Forget to say you are not a dimwit you are just inexperienced. You need to start reading the Financial Press and the Telegraph are good for pensions coverage.

Dazed_and_C0nfused

TVAS said:

You are self employed why not consider doing ad hoc single premiums i.e. a lump sum initially so you can swerve 40% tax. This is a good idea for you because when you do well in a particular month after putting the tax money aside you can shove in a lump sum. If you can do regular premiums as well why not.
  
How about half to pension and half to mortgage overpayment if your mortgage permits.

You have 10 yeas NHS so ask for a projection to the scheme normal retirement date.

I do not understand how you can have Nest and be self employed at the same time.

I would be minded to start a SIPP Vanguard or Nutmeg.  Good luck.

I think the op meant they are a basic rate taxpayer and are about to have their 40th birthday, not pay 40% tax 

Not that should stop them starting a pension but there is unlikely to be any personal income tax savings, just the basic rate tax relief added to the pension.

So a good way to immediately turn £400 into £500.

xylophone

I was employed in the NHS for ten years and was enrolled in their pension scheme. I became self employed 2 years ago and joined up to Nest. I also have a lifetime ISA. Now my business is doing a bit better I have a bit of spare cash to invest for the future/ retirement. 

You mention that you have a mortgage so presumably the Lifetime Isa is also part of your retirement planning?

https://www.gov.uk/lifetime-isa

Have you obtained a state pension forecast?

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

Re the NHS pension

https://www.nhsbsa.nhs.uk/member-hub/getting-estimate-your-pension

With regard to your NEST pension, you can make additional contributions.

https://www.money.co.uk/pensions/nest-pensions-your-questions-answered.htm

You can still save for retirement using NEST pensions if you work for yourself. Automatic enrolment won’t impact self-employed workers.

You’ll still receive the same tax benefits as employed workers but you won’t be bound by minimum contributions limits in the same way. The only rule is that you have to add at least £10 each time you make a contribution. This means you’ll have more flexibility.

If you decide you would prefer another pension scheme, you could consider transferring the NEST pension to another scheme and then continuing to contribute your increased amounts to your new scheme.

You have a wide choice of pension schemes - here is one which may be worth a look.

https://www.vanguardinvestor.co.uk/what-we-offer/personal-pension/personal-pension-account

TVAS

Oh thanks for the clarification on Nest xylophone and the 40% age 40 Dazed.

german_keeper

And of course remember that if there is a Mr or Mrs Edgylen retirement planning is a joint venture, so there may be value in paying money at some point into the spouse/partner's pension to take advantage of both Personal Tax Allowances in retirement.