Self Employed and Need a Pension.

ojandhugo

Hi All,

Advice needed really for a family member.

Family member is 50 year old self employed hairdresser with no personal pension. I said I would assist in getting one setup for them but I'm not a expert in this area. I've always had workplace pensions so never investigated a personal one for myself.

They did have a NEST pension from circa 10 years ago when they were employed before going self employed. I've looked at the pension helper website but this hasn't really helped me. Could anyone recommend a personal pension provider? Apart from the fees, do they all offer the same service?

Thanks

Albermarle

The pension type  they could enrol in is a Defined Contribution ( DC ) pension.
They come in different guises ( Nest; personal pension; SIPP etc ) but from a legal and tax point of view they are all the same.
The main difference tends to be with the range of investments on offer. Fees also vary and a few will offer you more guidance on what investments to pick ( but charge more) .

Similar question asked a couple of days ago.

48, Self employed, no pension... — MoneySavingExpert Forum

incus432

When I started self employment, my actions were

1. Open a SIPP in a low fee platform 

2. Pay in as much as could afford - up to earnings limit or Annual allowance

3. Invest it in a cheap global tracker fund, 

4. Keep adding to it each year

5. Don't touch it or trade in the meantime - even if the market slumps. 

6. Check on it once a year.

 

Marcon

See https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics and have a look at Pension Options for the Self Employed.

ojandhugo

Thank you all for the reply’s, it’s been very helpful.

Catman111

I took out a few personal pension plans approximately 40 years ago when I was self employed, they where by far the worst investment choices I made. ( very poor returns I suspect eaten up by charges and poor investment choices by the companies ).
if I was starting again I would invest more in ISA’s, the monies I invested this way gave a far higher return with the advantage that there is no tax payable on income once withdrawn.

Dazed_and_C0nfused

Catman111 said:

I took out a few personal pension plans approximately 40 years ago when I was self employed, they where by far the worst investment choices I made. ( very poor returns I suspect eaten up by charges and poor investment choices by the companies ).
if I was starting again I would invest more in ISA’s, the monies I invested this way gave a far higher return with the advantage that there is no tax payable on income once withdrawn.

Why wouldn't you make the same investment choices within a pension wrapper and get the bonus of tax relief?

Only 75% of the pension is taxable when taken out and that means pension gives an immediate advantage of 6.25% over an ISA for most people.

And nowadays the investment choices should be yours (or your IFA's), not the pension provider.