Uk Pension Schemes for the currently Self-Employed.
March 21, 2015 7:37 AM   Subscribe

What are the pension options for Self-Employed people in the UK? There seems to be a lot of options for "Personal Pensions" - which seems to mean self-managed? Can anyone explain the basics of what my options are? and how it relates to this SIPP/ Stakeholder stuff and/or NEST is that a government run pension scheme?

I am currently self-employed ~40yo. I may continue to be self-employed for some time or I may not I really don't know. I haven't contributed to a pension scheme since moving to the UK years ago (from Australia). At this stage its likely I will stay in the UK until retirement.

So I need to start contributing to a pension scheme but I don't want to have to "manage it" or do anything really. These SIPP . Stakeholder ones sound like you are responsible for investments etc.... Obviously I don't want to be throwing money away on manager fees and want the money to be safe. But I also want to be able to treat it like some savings account that gets all the pension tax benefits.
posted by mary8nne to Work & Money (1 answer total) 3 users marked this as a favorite
 
A personal pension is just the word for a pension that isn't through your job but that you signed up for on your own.

A SIPP is a kind of personal pension where you handle the investments entirely by yourself. You can invest in a simple set of index funds (it's not really difficult to learn enough about it to do this) and go in and balance them once a year. This is the way to get the lowest possible costs.

A stakeholder pension is a super-extra-regulated kind of personal pension, for example, the minimum payment is £20, and the fees are capped at 1.5%. These things are designed to be simple, so they are very set-and-forget, they often don't have many options of funds to choose from, and they may not have higher risk options available. They are targeted at people on low or irregular incomes or who think pensions are over complicated.

Other kinds of personal pensions are similar to the stakeholder pension, but likely with more choice in funds and higher fees.

NEST is a workplace pension scheme, this doesn't apply to you if you are self employed.

I suggest working out when you would like to retire and how much money you would need to retire on, and then start trying to figure out how to get there, maybe with the help of an independent financial advisor.
posted by emilyw at 2:09 PM on March 21, 2015


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