Pension for 27yr old Son

Sanxxx
Sanxxx Posts: 19 Forumite
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in Pensions, annuities & retirement planning
My Son is self-employed earning around the UK average wage, he currently has no present or past pension.

I'm going to persuade him to start one, even if only £50-100/month. I was thinking a SIPP with the likes of A J Bell/Cavendish/HL.

Q1 Is that the best option?

Whilst he might save regularly he certainly won't manage it.

Q2 Should the money go into a low cost tracker fund or is there a better alternative?

Q3 If a tracker....UK/Europe/World? or is it pot luck given the timeframe?

Thanks, Russell

Comments

  • Sobraon
    Sobraon Posts: 325 Forumite
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    Similar position with my 3 children, currently considering the Fidelity SIPP option.
    AIUI using ETFs/ITs/Shares the annual fee is capped at £45 and the dealing fees are 0.1%. Would use VWRL/HMWO and buy monthly.
  • Albermarle
    Albermarle Posts: 22,026 Forumite
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    For a simple and easy option you might be better looking at a personal pension rather than a SIPP.
    https://www.standardlife.co.uk/c1/pensions-and-retirement/saving-for-retirement/personal-pension-easy-option-features.page
    or a stakeholder pension
    https://www.cavendishonline.co.uk/stakeholder-pension
  • Alexland
    Alexland Posts: 9,653 Forumite
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    edited 8 July 2019 at 12:15PM
    Yes the Aviva stakeholder pension (signup via Cavendish) is very simple and will run on autopilot in the default strategy for years without any care or attention. It uses the same MyAviva login details as any car, home, life, etc insurance products he might have with them. The main downside is that it has a paper application process and a small initial setup fee.

    The DIY SIPP option is more complicated requiring investment choices and management of a cash balance to pay the platform fees and possible penalty fees if he loses track of the cash position.

    If he is running a limited company consider making director contributions for extra tax efficiency.

    Also consider a S&S Lifetime ISA which has a 25% bonus and no tax on withdrawal from 60+.

    Alex
  • Alexland
    Alexland Posts: 9,653 Forumite
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    Sobraon wrote: »
    AIUI using ETFs/ITs/Shares the annual fee is capped at £45 and the dealing fees are 0.1%.


    0.1% is the old fee - Fidelity's new platform is charging £10 per trade on these types of assets now.
  • atush
    atush Posts: 18,726 Forumite
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    I would say yes, those pension options are good as all above.

    If he wont manage it now, i suggest a Global (not UK or EU) tracker. Or a global multi asset fund if offered (high equity ratio)
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