Nest pension

Ozro

Hi, I am 58 and not sure how long I will be working at my current job as partners are likely to retire in a couple of years. I currently pay 5% and employer 3% into nest pension. I also add a small lump sum of £40 each month separately. I am wondering whether its worth really increasing my contribution to say 11% - employer not looking to increase their contribution unfortunately or am I better off opening a brand new SIPP? I have a with profits fund pension also maturing next year when I am 60 and wonder if it would be better to put into that new SIPP or transfer into the Nest? Any advice from would be appreciated, especially as I find the whole pension scenario quite difficult to understand - Thx

Albermarle

The problem with NEST is that all new contributions are subject to a hefty 1.8% charge, which other pensions do not charge. So if you can avoid this by adding extra contributions to a new pension/SIPP that could work.

However, the Nest ongoing charge of 0.3% all in is pretty good, so you would have to make sure that any new pension charges would not be much more than that ( or less ideally).

Also if you make your workplace pension contributions via a salary sacrifice scheme, then this could tip the balance back to Nest again.

Ozro

Thank you, this has just clarified what I thought - I have spoken to my employers about a salary sacrifice but don't really earn enough to make that worth it - think I will increase my contributions knowing they will be hit by a charge for the next couple of years and then move the maturing without profits into a new SIPP with a view to transferring the nest pension into it too. Nest looked way too complicated to keep and don't think they offer drawdowns so not going to be right for me.

LHW99

I have a with profits fund pension also maturing next year when I am 60

Be careful not to draw all the fund at once/ at all.

If you plan to keep the funds for a while, get your new SIPP open, and then ask them to do the transfer once the WP one matures

lordgivemestrength

https://forums.moneysavingexpert.com/discussion/comment/82072629#Comment_82072629

Does that mean if I increase my employee contribution, I'll pay 1.8% and not .3% ( I'm with Nest as aworkplace pension, and not likely to move before retirement. or is that for funds transferring in?

Sorry I'm a bit new to this and trying to (too late I know) to plan

Marcon

You'll pay a one-off contribution charge of 1.8% on your contributions and then an ongoing 0.3% on the overall fund value of your NEST pension savings.

There is no 1.8% contribution charge on transfers in.

lordgivemestrength

https://forums.moneysavingexpert.com/discussion/comment/82076569#Comment_82076569

Got it, thanks, that clears it up.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82076303#Comment_82076303

Nest looked way too complicated to keep and don't think they offer drawdowns so not going to be right for me.

Nest is one of the simpler pensions available, so you need to have a close look at any SIPP before opening one. They do not offer all drawdown options, but they do offer a specific retirement fund, which you can withdraw from and each withdrawal will be 25% tax free and 75% taxable.

Ozro

Oh ok thank you - I will probably go to pension wise to next year and although they can't offer advice, they should be able to perhaps tell me what to look out for.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82077677#Comment_82077677

The main options for withdrawing from a DC pension are ;

1. Take it all in one go - not normally recommended
2. Take the tax free cash in in go, or in stages. Then take the taxable income later.
3. Take payments that are all 25% tax free and 75% taxable. Normally called a UFPLS payment, which is what Nest seem to offer.
4. Buy an annuity with the pot.

Not all pensions offer all options.

Note that taxable income is not necessarily actually taxed. It depends on your other income, tax code etc.

grn99

https://forums.moneysavingexpert.com/discussion/comment/82077486#Comment_82077486

Just to let you know they will be doing flex drawdowns from the end of this year ….

https://www.nestpensions.org.uk/schemeweb/nest/retirement/retirement-options/self-managed.html