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  • FIRST POST
    • mightyimp1
    • By mightyimp1 12th Jan 18, 11:47 AM
    • 3Posts
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    mightyimp1
    Self-Employed Pension Advice - aged 27
    • #1
    • 12th Jan 18, 11:47 AM
    Self-Employed Pension Advice - aged 27 12th Jan 18 at 11:47 AM
    Hi all.

    Happy New Year.

    I'm certainly not 'old' but I probably am not so 'young' anymore. I have to start thinking of when I'm certainly much greyer!

    I am self-employed and wondering what is the best thing for me to do regarding a pension. It was just something my Mum mentioned recently and I think it'd be wise to put some wheels in motion. Would it be a private pension? Savings? Any info is appreciated as I'm a bit of a novice and don't want to make an error of judgement!
Page 1
    • greenglide
    • By greenglide 12th Jan 18, 12:07 PM
    • 3,104 Posts
    • 2,020 Thanks
    greenglide
    • #2
    • 12th Jan 18, 12:07 PM
    • #2
    • 12th Jan 18, 12:07 PM
    Are you truly "self employed" as in a sole trader or do you have a limited company of which you are a director? It you are a limited company you are not self employed.

    Getting your employment status right matters for pensions but many people get it wrong here.
    • BLB53
    • By BLB53 12th Jan 18, 12:10 PM
    • 1,306 Posts
    • 1,089 Thanks
    BLB53
    • #3
    • 12th Jan 18, 12:10 PM
    • #3
    • 12th Jan 18, 12:10 PM
    A popular option for the self employed would be to start your own SIPP with one of the low cost online brokers such as AJ Bell Youinvest. You then set up your monthly DD and select one or more funds to invest in.

    I like the all-in-one Vanguard Lifestrategy range for simplicity but their Target Retirement funds would be another option.

    It does not need to be much more complicated really.

    If you want to explore a DIY pension in more detail then I recommend get hold of the book 'DIY Pensions' by Edwards and see if it makes sense.

    If you do not want to diy, then you can consult an IFA who will charge a fee or you can look at the robo-advisor alternatives such as Nutmeg or Moneyfarm for example.

    The main advice I would give is to actually do something and make a start.
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • xylophone
    • By xylophone 12th Jan 18, 12:20 PM
    • 25,577 Posts
    • 15,105 Thanks
    xylophone
    • #4
    • 12th Jan 18, 12:20 PM
    • #4
    • 12th Jan 18, 12:20 PM
    https://www.taxcafe.co.uk/pensionmagic.html

    may be worth a read.

    https://www.pensionbee.com/pensions-explained/frequently-asked-questions/self-employed-pensions?ast=bQTPl6

    https://www.gov.uk/new-state-pension
    • mightyimp1
    • By mightyimp1 13th Feb 18, 4:03 PM
    • 3 Posts
    • 0 Thanks
    mightyimp1
    • #5
    • 13th Feb 18, 4:03 PM
    • #5
    • 13th Feb 18, 4:03 PM
    Are you truly "self employed" as in a sole trader or do you have a limited company of which you are a director? It you are a limited company you are not self employed.

    Getting your employment status right matters for pensions but many people get it wrong here.
    Originally posted by greenglide
    It is a complicated one. I don't own any company or anything, but we all sign on as self-employed for tax purposes. Officially, we are set work, but we dictate out own hours so to speak. I work from home. I sign a contractor contract every year.
    • greenglide
    • By greenglide 13th Feb 18, 5:03 PM
    • 3,104 Posts
    • 2,020 Thanks
    greenglide
    • #6
    • 13th Feb 18, 5:03 PM
    • #6
    • 13th Feb 18, 5:03 PM
    It isn't complicated.

    If you are a sole trader, paying class 2 and class 4 NI then you are self employed. It sounds as if you are.

    If you trade as a director of limited company, as many people do, then you are not self employed irrespective of what people call themselves.

    Calling yourself self employed does not make you self employed! Being a sole trader without a limited company does.
    • kidmugsy
    • By kidmugsy 13th Feb 18, 7:06 PM
    • 10,866 Posts
    • 7,431 Thanks
    kidmugsy
    • #7
    • 13th Feb 18, 7:06 PM
    • #7
    • 13th Feb 18, 7:06 PM
    Two things you might like to consider as suitable for saving for old age are (i) a personal pension of some sort, and/or (ii) a LISA (Lifetime ISA).

    But before you contribute much to either of those you might be wise to ensure that you have a good "emergency fund" of cash built up. The best interest rates you can get at the moment are in some Current Accounts and Regular Savers.
    Free the dunston one next time too.
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