Investment Advice??

Hi guys. 
I know a lot of people will be looking for the golden egg in terms of making money but all I’m after is some decent info or advice please. 
I’m not getting any younger and the fact I’m self employed I don’t really have a pension pot for retirement. 
I have two pensions going which are very small due to not paying into them since being self employed. 
I have spoken to a few accountants in the past regarding a pension pot/retirement plan, with no real advice on what’s best for me going forward. 
I suppose I’m asking for a bit of help in regards to what may be worth looking into moving forward??
Any advice would be greatly appreciated, thanks. 
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Comments

  • El_Torro
    El_Torro Posts: 1,429
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    Accountants won't help you much in this area, you're better off going to an Independent Financial Advisor. An IFA may not be very interested in working with you though if you don't have a significant amount of money available to invest (at least £100k, including pensions and other cash).

    If you're looking to build a pot for your retirement years then a pension is probably the best way to do this, at least the most tax efficient way. You may also want to invest in Stocks & Shares ISAs, depending on when you want to retire and how flexible you want your access to your money to be.

    In order to get a pension you need to decide which platform you want to invest in and what you want to invest in. Most of the people on this forum (myself included) would suggest investing in global trackers and globally invested multi asset funds. There are literally thousands of funds out there, though if you limit yourself to global trackers and multi asset funds that makes for fewer choices, which is a lot less daunting. You can even invest in individual shares of companies, though I would strongly advise against this, especially if you have not taken a keen interest in investing before now.

    The important thing is for you to know when you want to retire and how big you want your pension pot to be when you do retire. You may find that the amount of money that needs to be invested in order for you to have a comfortable retirement is a lot higher than you expect.
  • Macka09
    Macka09 Posts: 48
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    I really appreciate you taking the time to reply.
     
    I certainly won’t be looking to retire within the next 20 years that’s for sure, unless I manage to win the lottery. 

    I just really don’t know where to start with it all. I do have 2 minuscule pensions that are from previous employments years ago. Unfortunately they have just sat there over the years since I’ve been self employed. 

    There seems to be a lot of professionals about who will happily charge me for advice, which has never really helped me to understand what would be best. I seem to be more confused after a consultation than before. 



  • Nasqueron
    Nasqueron Posts: 8,379
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    An IFA specialising in pensions can give you a free consultation where they look at what you have and what you want to achieve and then make recommendations (a comprehensive one will be on the basis they run it for you and charge you a fee but they can usually give a basic bit of advice). The Unbiased site even allows you to select sub 20k pensions. I know when I started using one it was about 30-40k total 

    https://v2.unbiased.co.uk/enquiry/financial-adviser/pensions-and-retirement/pensions-and-retirement-planning/value

    It's wise to get both your pensions with the most recent financial statement before you go, along with an idea of what you can afford to save
  • Albermarle
    Albermarle Posts: 21,181
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    A pension  is just a way of investing with tax benefits.

    So two issues-
    Why invest and not just save money up in a bank account?  answer is because over a 20 or 30 years period your money is almost certainly going to grow more.
    Why invest via a pension? answer is that your contributions will get tax relief added, although you will not be able to access the money before your late 50's

    You might be able to reactivate one of the old pensions, although probably better to open a new one and transfer the old pensions into it. To do this is surprisingly simple. The more difficult bit is deciding which investments to buy within the pension, but there is help available.

    However to go back one step, what is the rest of your financial situation? Mortgage? cash savings ? as it is best to look in the round at your finances.
  • Macka09
    Macka09 Posts: 48
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    Thanks for the reply. 

    My biggest issue is the fact I’m self employed, my earnings and what I can afford to save/invest changes quite rapidly. 

    I will take a look at the link you’ve sent me, thank you. 
  • Roger175
    Roger175 Posts: 132
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    I have been self employed for much of my working life and have a reasonable pension pot. The fact that you are self employed just means you have to make your own contributions as clearly you won't have a work based scheme or Employer contributions.

    The way I have done things over the last few decades is to make a lump sum contribution into my SIPP once a year to mitigate paying higher rate tax. I have never been a particularly high earner, but typically I would earn enough to tip me over the higher rate threshold, sometime only by a small amount, other years by say £8-10k. My accountant would do my tax return each year and then drop me an email telling me what figure he suggested I pop into my SIPP to avoid paying any HR tax. Doing this for 30 odd years, has built up a reasonable sum (over £400k, which added to another £300k savings/investments outside the SIPP and my wife's small DB pension, has allowed us both to retire early at 59 years old.

    The benefits of putting money into a pension cannot be over emphasised, especially if you can get tax relief at 40%. For a higher rate tax payer who expects to be a standard rate tax payer in retirement, you will get a 41.67% uplift, but if like me, you retire early, any money you can draw down when you are a non-taxpayer gets an effective uplift of 66.67%. Obviously this amount is limited and once you start receiving state pension, it will mop up all the nil tax band, but nevertheless it's a considerable benefit and that's before you get any growth on the investments.
  • Roger175
    Roger175 Posts: 132
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    Macka09 I should just add that I have not used a Financial Advisor for many years. Just open a SIPP with the likes of AJ Bell or Hargraves Lansdown and start making those contributions. 

    I actually got quite into the investment side of things, but it can be very time consuming, so unless it interests you and you have the time, just stick with low-cost tracker funds. I now generally pile anything new into HSBC FTSE All-World Index C Acc. Not necessarily the best but with an on-going charge of only 0.13%, it will see you perfectly well if you just want to get going.
  • Albermarle
    Albermarle Posts: 21,181
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    Macka09 said:
    Thanks for the reply. 

    My biggest issue is the fact I’m self employed, my earnings and what I can afford to save/invest changes quite rapidly. 

    I will take a look at the link you’ve sent me, thank you. 
    Making irregular contributions should be no issue. All can be done on line in a couple of minutes.
  • Macka09
    Macka09 Posts: 48
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    @Roger175
    I really appreciate the reply. 

    I have been very silly upto now regarding money in the future and retirement. As it is now creeping up I’m panicking about it. 

    The investment side of things is interesting but I just don’t understand it enough to risk playing with real money. A few friends in the trade have gone into Forex trading and rave about it but again, they’re still on the tools so I take it all with a pinch of salt. 

    I will have to have a good look into the Sipp you mention. Thank you. 
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