Pension on a zero hours contract

Ozro

Hi, my son has started work at a gym and they are not offering a pension. He is on a zero hours contract. I presume he will just have to find and set up his own pension. I find them all totally confusing so not sure how best to advise him. We can't afford pension advice. I am confused as it seems that you are either in a workplace pension or you are self employed, so he is neither. Does this matter? I didn't know whether it would be better just to get a Nest pension but is that one just a workplace pension. Also I am not sure if you can change the amount you pay each month as his salary is very varied but my thinking best to put something in rather than nothing.  Any help would be appreciated with this subject.

sammyjammy

Workplace pensions: Joining a workplace pension - GOV.UK (www.gov.uk)

Brie

I know that the general advice is for people to start saving in a pension as early as possible to give all those pennies a chance to accumulate and grow.  On that basis he could set up a pension with any provider (Aviva, Pension Bee, etc) and continue to add to it as his income grows.  The crucial thing is to check what fees will be charged on funds so that he can maximise the benefits (I've been told NEST fees are high).  The other thing is to ensure there are some diversity in the funds - so not just all in one company in case market forces don't work in his favour.  People on the pensions board will be able to advise better on this (I will ask for this to be moved there to get their attention).

His alternative, assuming he is still living at home or maybe renting somewhere, is to save into a LISA or similar in order to accumulate a down payment to buy somewhere.  Even popping money regularly into a high interest saving account of any sort would be a good start for him as long as he sorts the rest out at some point. 

LHW99

And the advantage of a LISA is that even if he eventually doesn't use it for a house purchase, it could be used for retirement, rather like (but not the same as) a pension.

MEM62

Ozro said:

Hi, my son has started work at a gym and they are not offering a pension.

If he is over 22 earning more than £192 per week his employer must enroll him in a workplace scheme.  Even outside that criterion he can ask to be enrolled.    

JoeCrystal

Ask the employer for their pension scheme details for a start. That should be first port of call. All employers if employing employees must have an auto enrollment pension scheme set up anyway.

Marcon

Ozro said:

Hi, my son has started work at a gym and they are not offering a pension. He is on a zero hours contract. I presume he will just have to find and set up his own pension. I find them all totally confusing so not sure how best to advise him. We can't afford pension advice. I am confused as it seems that you are either in a workplace pension or you are self employed, so he is neither. Does this matter? I didn't know whether it would be better just to get a Nest pension but is that one just a workplace pension. Also I am not sure if you can change the amount you pay each month as his salary is very varied but my thinking best to put something in rather than nothing.  Any help would be appreciated with this subject.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/auto-enrolment/automatic-enrolment-if-youre-21-or-under is likely to make helpful reading (your previous post referred to him as a student, so I suspect he's still under 22).

Ozro

Hi everyone. Thank you for your comments. His workplace do not offer a pension and it specifically says that in his contract. Presume it’s because they have him on zero hours and the PTs in the gym are self employed.
Had thought about a LISA as the reality of him buying a house in the south east is probably very unlikely so could go towards his pension instead.
In the fitness industry he is likely to be self employed so at some point will still be advisable to look at pensions. They just all feel very confusing which one would be best especially with charges if you don’t put a lot in and then maybe have to pause it

JoeCrystal

The fact is that even zero hour contact is still eligible to be auto enrolled or ask to be enrolled.

Are he sure is he actually employed or self employed? Sound odd to be self employed but got contract?!

Is he going to be on PAYE and paying Income taxes and NIs? If so then that is an employee in my eyes.

What does the article in the contract actually said regarding the pension?

artyboy

If he is self employed, but is effectively working full time and exclusively at one gym then this really has a whiff of masked employment about it...

LHW99

In the fitness industry he is likely to be self employed so at some point will still be advisable to look at pensions. They just all feel very confusing which one would be best especially with charges if you don’t put a lot in and then maybe have to pause it

If he doesn't want a LISA and would really prefer to start a pension, it is very easy to open a SIPP at eg Hargreaves Lansdown (other platforms are available).He could pay anything upwards of £25 per month, and their fees are 0.45% pa, which is OK when he is just starting, as he won't have much in.

If he invests that regularly into a fund (rather than an investment trust / ETF) there are no extra charges.

He could choose a whole world tracker (such as Fidelity Index World) or a multiasset fund (like HSBC dynamic) - again others are available.

https://www.hl.co.uk/pensions/sipp

https://www.hl.co.uk/pensions/contributions

It could be transferred into another DC pension if he ends up somewhere that does have an autoenrollment scheme.