Costs when setting up pension with an independent financial advisor (IFA)

sandsy

See the section entitled adviser charging:

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm143200

Most advisers operate on the basis of giving an initial piece of advice, eg transfer of pensions/setting up a new pension and then ongoing advice, ie keeping in touch with you annually to ensure their advice remains suitable or advising on changes if not, say, if your circumstances change. 

There will usually be a higher one-off charge for the initial advice. Then a lower charge each year for retaining the adviser, but typically taken in instalments each month from the value of the pension. You don't have to take the ongoing advice but many advisers will refuse to give initial advice if you indicate this in advance. You have the right to cancel ongoing advice at any time without giving a reason.

Huffnagel

Thanks everybody. Forgot to come back to this topic! Basically, we found the old NEST membership and they let you pay into the existing pot as self-employed, just had to set up the monthly contributions.

https://www.nestpensions.org.uk/schemeweb/nest/my-nest-pension/joining-nest/joining-as-self-employed.html

PS. The IFA wanted to charge £500 one-off, we discussed it with her again and there's no point for this or any ongoing advice as the pot is too small. For now, we just go with NEST and I'll keep researching.

Albermarle

Huffnagel said:

Thanks everybody. Forgot to come back to this topic! Basically, we found the old NEST membership and they let you pay into the existing pot as self-employed, just had to set up the monthly contributions.

https://www.nestpensions.org.uk/schemeweb/nest/my-nest-pension/joining-nest/joining-as-self-employed.html

PS. The IFA wanted to charge £500 one-off, we discussed it with her again and there's no point for this or any ongoing advice as the pot is too small. For now, we just go with NEST and I'll keep researching.

The downside with Nest is that they charge 1.8% on all new contributions as a one off. This is pretty unique as normally there is no charge like this .
On the other side their all in ongoing charge of 0.3% is on the low side.
So the longer you stay with them, then the 1.8% charge gets slowly diluted away.

dunstonh

Huffnagel said:

Thanks everybody. Forgot to come back to this topic! Basically, we found the old NEST membership and they let you pay into the existing pot as self-employed, just had to set up the monthly contributions.

https://www.nestpensions.org.uk/schemeweb/nest/my-nest-pension/joining-nest/joining-as-self-employed.html

PS. The IFA wanted to charge £500 one-off, we discussed it with her again and there's no point for this or any ongoing advice as the pot is too small. For now, we just go with NEST and I'll keep researching.

£500 on off could easily work out cheaper than NEST.  For example £300x12=£3600.   Over 10 years, that is £36,000.  Multiply by 1.8% and you have £648 initial charge.