which pesion/sipp/fund supermarket etc?

ron3994

i am 34 years old and self emplyed. i do not have any pension provision at the moment but am keen to set something up pronto!
i want to invest £500-750 per month and my attitude to risk is moderate to high risk , or numerically about 6-7/10.
i have been doing some reseach and have looked at IFA advice, choosing my own pension, or even managing my own sipp. i feel that i am not savvy enough to run my own portfolio so that leaves ifa advice vs picking my own pension. i have looked at www.cavendishonline.com.uk and they have a good selection of pension providers, with the advantage that there is only a minimal charge compared with IFA fees/comission. i am not against paying for advice but the 2 advisers that i have spoken to seem to be talking about extortionate fees, or commision.
my question is, can anybody direct me towards good pension funds for an investor with my risk profile (i was looking at scandia, clerical medical, scottish widows etc). also would fund supermarkets be a wise move?. failing that would anyone suggest a good IFA who has a realistic fee.

many thanks

dunstonh

i was looking at scandia, clerical medical, scottish widows

Skandia - good a few years back but its sister company Selestia has a better contract. Dont expect to see the Skandia contract round much longer
clerical medical - good low risk range of funds on their PPP. SHP is a waste of time. Not suited for medium/high or higher risk investors
Scot Widows - SHP is a waste of time. PPP or retirement account are both quite suitable apart from those wanting a very diverse portfolio (retirement account is fine but your pension value isnt high enough to make the charges worthwhile).

i have looked at www.cavendishonline.com.uk and they have a good selection of pension providers

I would disagree with that. They have a limited panel of providers available and are missing some of the more modern versions (post A day) pensions.

with the advantage that there is only a minimal charge compared with IFA fees/comission

Their big selling point and certainly an advantage if you know what you want.

i am not against paying for advice but the 2 advisers that i have spoken to seem to be talking about extortionate fees, or commision.

Like any retail service, the amount an adviser chooses to charge is up to them. I'm not sure what you class as extortionate as £500-£750 a month with no existing fund value is never going to generate a lot of commission in the short term.

also would fund supermarkets be a wise move?

Its where I have mine. However, I dont put everyone there professionally as it really depends on what sort of investments you want, your risk profile and what sort of ongoing servicing or DIY servicing you want.

failing that would anyone suggest a good IFA who has a realistic fee.

You transaction is probably not worth doing on fee basis. It isnt big enough. You are better off with commission or hybrid (where you agree a fee but its paid out of the commission). The hybrid option is more tax efficient as well as the fee gets tax relief at your highest rate.

EdInvestor

The basic point about a pension (or any other type of funding for retirement) is to decide what you want to invest the money in first.

Then seek the provider who gives access to the funds/shares/whatever you want to invest in at the lowest cost.

If you are looking at investing in funds the following site will enable you to weed out the best ones in each category:

https://www.citywire.co.uk/funds/home.aspx

After you've got a list of suitable funds, you can look through the various insurance company pensions/Sipp lists of funds to see who offers your choices and charges the least.

ron3994

thanks for the replies guys. was wondering if you could be able to direct me to the better selection of Post A day pensions suitable for my risk proofile so that i can do more research on them.
also, DUNSTONH, i would like to find out more about potentially investing in fundsupermarkets. would you be able to advise me as to the best way to research that. do you offer this service? if so please send me your details so that i can contact you directly
your help is much appreciated!

mrodent

The main point I would make is that (until further notice) pensions make sense for higher-rate tax payers. But are you one? If not, bear the following in mind when choosing whether to prioritise investing in ISAs (annual allowance £7200) BEFORE investing in some sort of Pension:

1) although the government top up 22% on top of what you will pay into the pension account, you will in fact pay tax (!) on the pension you eventually receive from the annuity company
2) ISAs, both increase in value and income, on the other hand will not be subject to tax ... EVER. Even if, at a later stage in your life you become a higher-rate taxpayer.
3) you cannot decide at a later stage to do something else with your pension scheme: and eventually you will have to do a deal with an annuity provider. This is a BIG problem: particularly with a population whose life expectancies are getting longer and longer: this has the effect of making annuity rates fall, for a given pension pot. The other problem is that annuity providers are commercial companies, not an arm of government: they do not have your interests at heart in any way, they are simply trying to make as much profit as possible... FROM YOU AND YOUR TRAPPED HARD-EARNED CASH.
4) bear in mind that IFAs may have various reasons to want to recommend pensions as a "safe" form of investment which, again, do not necessarily coincide with your own interests: in fact "safety" has to do with the choice of investment funds, and nothing which I can see to do with whether the investment "vehicle" is a pension or an ISA portfolio.

Have a think about it... and think about using that ISA allowance first.

MRodent

dunstonh

) although the government top up 22% on top of what you will pay into the pension account, you will in fact pay tax (!) on the pension you eventually receive from the annuity company

Incorrect on a few accounts. Tax relief is either 20% or 40%. 25% of the fund can be paid tax free. The other 75% buys the income which is potentially taxable depending on your personal allowance at the time. Contributions into pensions can also increase working/childrens tax credits allowing a theoretical maximum of around 72% equivalent tax relief.

2) ISAs, both increase in value and income, on the other hand will not be subject to tax ... EVER. Even if, at a later stage in your life you become a higher-rate taxpayer.

Correct. Although the value of the ISA will be lower than the pension due to no tax relief.

4) bear in mind that IFAs may have various reasons to want to recommend pensions as a "safe" form of investment which, again, do not necessarily coincide with your own interests: in fact "safety" has to do with the choice of investment funds, and nothing which I can see to do with whether the investment "vehicle" is a pension or an ISA portfolio.

I dont understand why you think an IFA would favour a pension over an ISA. I dont know any IFAs that do. I have never heard of an accusation of bias between the pension and ISA wrappers.

Have a think about it... and think about using that ISA allowance first.

Or perhaps weigh up the pros and cons of both options and make an informed decision based on personal circumstances.