'Middle of the road' pension provider

inkydolphin

Hi - I'm after any thoughts as to whether there are any 'middle of the road' pension providers that don't offer anything particularly special but are safe - i.e. well established, low risk investments and unlikely to be selling inappropriate pensions. If more info needed, it's for my wife, who is mid-40s and doesn't have private pension provision other than a small civil service pension from 8 years service in the 2000s. Thinking of starting low on paying in - say £50 per month with the option to vary payments on a monthly basis. It may be the case that she should get independent advice but is that needed for what will be comparatively small amounts? Thanks.

Albermarle

Thinking of starting low on paying in - say £50 per month with the option to vary payments on a monthly basis. It may be the case that she should get independent advice but is that needed for what will be comparatively small amounts? 

A financial advisor charges would be far more than she would be contributing so you would end up with less than you started. In reality no one would be interested, even if it was £500 per month.

 I'm after any thoughts as to whether there are any 'middle of the road' pension providers that don't offer anything particularly special but are safe - i.e. well established, low risk investments and unlikely to be selling inappropriate pensions

Firstly you need to be clear that the pension provider is more of a facilitator/administrator, and your money is invested in funds within the pension, which you have to choose. Some will point you in the right direction( as will this forum ) but they will not directly say an investment is suitable for you , as that is personal financial advice. A pension is just a tax beneficial way of investing.

There are many pension providers that are reputable and safe, but whatever investments you choose may go up or down ( but hopefully up in the long term) So called 'low risk' investments can also be problematic and for long term investing are not really suitable.

Suggest as a starting point you read up about the basics of investing. Investing in stocks for beginners: how to get started - MSE (moneysavingexpert.com)

Investing for beginners: Why do we invest? - Monevator

If you go to the websites of these pension providers, they all have sections giving general info for newbie investors.

Hargreaves Lansdown; Vanguard; Fidelity; A J Bell ; Standard Life etc 

inkydolphin

Albermarle said:

Thinking of starting low on paying in - say £50 per month with the option to vary payments on a monthly basis. It may be the case that she should get independent advice but is that needed for what will be comparatively small amounts? 

A financial advisor charges would be far more than she would be contributing so you would end up with less than you started. In reality no one would be interested, even if it was £500 per month.

 I'm after any thoughts as to whether there are any 'middle of the road' pension providers that don't offer anything particularly special but are safe - i.e. well established, low risk investments and unlikely to be selling inappropriate pensions

Firstly you need to be clear that the pension provider is more of a facilitator/administrator, and your money is invested in funds within the pension, which you have to choose. Some will point you in the right direction( as will this forum ) but they will not directly say an investment is suitable for you , as that is personal financial advice. A pension is just a tax beneficial way of investing.

There are many pension providers that are reputable and safe, but whatever investments you choose may go up or down ( but hopefully up in the long term) So called 'low risk' investments can also be problematic and for long term investing are not really suitable.

Suggest as a starting point you read up about the basics of investing. Investing in stocks for beginners: how to get started - MSE (moneysavingexpert.com)

Investing for beginners: Why do we invest? - Monevator

If you go to the websites of these pension providers, they all have sections giving general info for newbie investors.

Hargreaves Lansdown; Vanguard; Fidelity; A J Bell ; Standard Life etc 

Thanks for that, much appreciated. I have a good grasp of most things but pensions seem to cause some sort of mental block weirdly.

Albermarle

inkydolphin said:

Albermarle said:

Thinking of starting low on paying in - say £50 per month with the option to vary payments on a monthly basis. It may be the case that she should get independent advice but is that needed for what will be comparatively small amounts? 

A financial advisor charges would be far more than she would be contributing so you would end up with less than you started. In reality no one would be interested, even if it was £500 per month.

 I'm after any thoughts as to whether there are any 'middle of the road' pension providers that don't offer anything particularly special but are safe - i.e. well established, low risk investments and unlikely to be selling inappropriate pensions

Firstly you need to be clear that the pension provider is more of a facilitator/administrator, and your money is invested in funds within the pension, which you have to choose. Some will point you in the right direction( as will this forum ) but they will not directly say an investment is suitable for you , as that is personal financial advice. A pension is just a tax beneficial way of investing.

There are many pension providers that are reputable and safe, but whatever investments you choose may go up or down ( but hopefully up in the long term) So called 'low risk' investments can also be problematic and for long term investing are not really suitable.

Suggest as a starting point you read up about the basics of investing. Investing in stocks for beginners: how to get started - MSE (moneysavingexpert.com)

Investing for beginners: Why do we invest? - Monevator

If you go to the websites of these pension providers, they all have sections giving general info for newbie investors.

Hargreaves Lansdown; Vanguard; Fidelity; A J Bell ; Standard Life etc 

Thanks for that, much appreciated. I have a good grasp of most things but pensions seem to cause some sort of mental block weirdly.

Just remember that the pension, is only a way of investing, but with tax breaks. The downside is that you can not access the money until your late Fifties.
So if you are investing for retirement then it is almost always better to invest via a pension. If you want to access the money earlier then better to invest via a Stocks and shares ISA, but less tax beneficial than a pension.

xylophone

She might wish to consider the Vanguard  target  retirement option.

https://www.vanguardinvestor.co.uk/investing-explained/what-are-target-retirement-funds?cmpgn=PS0220UKBABTR0001EN&s_kwcid=AL!11156!3!593570599619!e!!g!!vanguard target retirement fund&gclid=EAIaIQobChMIi-20i_e3-QIVxI9oCR1cUwZxEAAYASAAEgJPQvD_BwE&gclsrc=aw.ds

Does your wife have any "relevant earnings"?

https://techzone.abrdn.com/public/pensions/Guide-Individuals-Contributions

 Even If she has none, she can still contribute up to a net £2880 to a pension and the provider will claim tax relief of up to £720 and add it to her pot.

Dazed_and_C0nfused

As she's presumably not working then financially it would make sense to start by looking at her State Pension.

Firstly she needs to look at her State Pension forecast on gov.uk.  And must read it in full to see what she has accrued to date.

Then consider if she is likely to reach the standard amount of £185.15/week from working or getting any available credits.

If not then voluntary NI contributions are fantastic value.  A single post 2016 year will cost c£800 and could add £5.29/week.  Payable from State Pension age for the rest of her life.

Be careful about the final year though, if she has currently accrued say £174.42 and needs three more years then an extra two years would add £5.29/week for each year but the third year only adds £0.15/week, not such a good investment.

inkydolphin

Thanks for the responses - some useful things to have a look at!

Anonymous101

For someone in your wife's position I'd think that just opening a low cost SIPP at someone like Vanguard and then picking a low cost all in one fund such as the "Life Strategy 60% equity" fund or a target retirement date (as noted above) would be the best bet.

inkydolphin

Anonymous101 said:

For someone in your wife's position I'd think that just opening a low cost SIPP at someone like Vanguard and then picking a low cost all in one fund such as the "Life Strategy 60% equity" fund or a target retirement date (as noted above) would be the best bet.

Thanks for the response. So reading your post and the previous replies, you open a SIPP, you then tell the SIPP provider which of their investment products you want them to use to manage the money you put into the pension, and that together forms your pension plan. The reason for a pension over savings is the tax benefits, and there's a chance you could get a very good return, but equally there's a chance you could get back less than you put in. Is that about it?

One question I would have is do pension providers let you change the investment option or does that vary between providers?

dunstonh

One question I would have is do pension providers let you change the investment option or does that vary between providers?

SIPPs are the most comprehensive pension product.  They typically have over 30,000 investment options.   You can switch between them as you wish.   However, there are some pension providers that call themselves SIPPs but restrict choice to their own in-house range.   There are also personal pensions that have a smaller range (sometimes in the dozens of funds to hundreds) and robo providers (maybe a handful of investment options).

Albermarle

Thanks for the response. So reading your post and the previous replies, you open a SIPP, you then tell the SIPP provider which of their investment products you want them to use to manage the money you put into the pension, and that together forms your pension plan. The reason for a pension over savings is the tax benefits, and there's a chance you could get a very good return, but equally there's a chance you could get back less than you put in. Is that about it?

Yes that is about it . You can add money in lump sums, or have a regular contributions plan set up.

Investing, in a pension or elsewhere is a long term game, so don't keep checking it and wondering whether to pull out. The trick is to Buy and Hold.