Self-employed pension help

Hi, myself and my husband both recently went self-employed and work together running a cafe.  We both have previous pension pots from working for companies but no clue on what to do now.  Should we put money aside into a LISA or a SIPP or a company like pensionbee - really no clue and looking for help.  I'm unsure if Sipps are risky?  what would be the best thing for us to do?  should we transfer our previous pension pots to new ones or leave where they are?  

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  • DE_612183
    DE_612183 Posts: 1,589
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    I was self-employed for a while - as part of that I started ( think it was a requirement anyway ) of paying into a Nest Pension fund - you can choose your level of risk - if you're unsure ( as I was ) that was the best thing to do.

    I did transfer some other SIPPS once I realized the Nest Pension was working better.

    Regarding the previous pension pots - it depends what they are - I had a final salary one which I was never going to touch as there was no risk whatsoever.
  • Your workplace pensions can stay where they are for now. If they were decent then, they will remain decent now. In due course maybe you could take a look at whether they were actually any good (the annual charges and where they are invested).
    Are you sole traders, or employees of a limited company (the cafe)?
    If it's the latter, it will likely be best to have the cafe make pension contributions for you, as that often leads to the biggest tax saving.
    If you are sole traders, open a SIPP each, and pay in what you can afford from your take-home pay. You will get a 25% add-on from the taxman, up to a maximum of the full extent of your profits. Pensionbee is an option. The good part is that they make it very low-trouble by doing as much as possible for you. Ideally you would do a bit of learning, and you can probably pick some investments for yourself that suit you better, or cost less. If you are clueless and happy to remain that way, PensionBee could be your solution.
    All investments are risky. So is running a cafe. No risk, no reward. The money in your SIPP could go down, but over the long term is likely to go up. If you don't take some risk you are likely to hurt your returns. You at least want to keep up with inflation, or your money is shrinking.

  • Yes we are sole traders!  ok so sipp sounds the way to go.  we do each have currently LISAs but dont pay much in each month.  So maybe spreading funds is the way to go and go for a sipp each.  I may have a look at the nest pension too
  • dunstonh
    dunstonh Posts: 115,633
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    Yes we are sole traders!  
    You say you work together - That would make you a partner rather than a sole trader (sole being single person).  If so, is that a plain partnership or an LLP partnership?

    I'm unsure if Sipps are risky? 
    SIPPs, PPPs (personal pension plan), SHP (stakeholder pension plan) or robos are all variations of a theme and all are regulated by the FCA and subject to the same FCA rules.    If you held, say a global tracker, in each of the types then you are going to have identical investment risk.  

     I may have a look at the nest pension too
    NEST was brought in to cater for auto-enrolment.   It was aimed as a basic option for very small employers as there was a fear that there wouldn't be an efficient market for small companies.  As it happened, that fear was unfounded as a number of companies decided to cater for small companies and the bottom end.

    You don't have to worry about auto-enrolment unless you employ someone.  So, NEST shouldn't be entering the equation.  (yes, they have had mission creep and used taxpayers money to expand into the individual side but with a 1.8% initial charge, its not good value)



    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • yes sorry partnership!  Gosh im useless! So Sipp it is then!
  • plain partnership not LLP
  • Marcon
    Marcon Posts: 9,922
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    A free self-employed pension review might help: https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics/midlife-review-for-self-employed-people

    You won't get any hard sell (or any sort of sell!) and you won't get financial advice (as in 'I suggest you do this...') but you'll get a lot of info and the chance to have questions answered directly.
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
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