Pensions - IFA or Private

**Fred Bloggs** · 28 August 2016, 09:34

I think you need to look at moving the ex company pension onto a platform. You can easily manage it yourself then. It is very simple and straightforward to do. For pots below ~£40k you could consider HL who charge 0.45% per year fees. For larger pots I suggest a flat fee platform like Interactive Investor which would be cheaper for larger pots. And no, you do not need an IFA.

**BigRed** · 28 August 2016, 09:35

Read The Motley Fool, set up a SIPP.

**mudskipper** · 28 August 2016, 10:35

You may be able to make company contributions into an existing scheme, but it may be worth looking at alternatives that might give a better return.

Lots of info on Hargreaves Lansdown's website.

**cwise01** · 28 August 2016, 20:23

Thanks for the replies...In general, what are your opinions of IFAs? Worth the money?

**cwise01** · 28 August 2016, 20:42

Thanks

Thanks for the info, really useful! Out of interest, what are people's opinions of IFAs?

**Fred Bloggs** · 28 August 2016, 23:29

Originally posted by cwise01 View Post

Thanks for the info, really useful! Out of interest, what are people's opinions of IFAs?

Waste of time and money. Had one bad experience which led to a mis-selling claim. Never again.

**handyandy** · 29 August 2016, 17:07

Originally posted by Fred Bloggs View Post

Waste of time and money. Had one bad experience which led to a mis-selling claim. Never again.

Totally agree but be aware that investing large amounts of money is not simple and there are lots of pitfalls - that's why IFA's are reccomended everywhere as they are meant to stop total disasters due to clueless investors getting duped.

So - don;t use an IFA but do educate yourself and do some research before jumping into anything big. Try asking fellow contractors at a similar age/life stage to yourself what they do. Also browse the websites of the two SIPP providers mentioned on here.

Personally I used an IFA twice and then realised they do bu**er all for their money so I opened ISA and SIPP accounts with Hargreaves Lansdowne and used their research plus talking to others in order to decide what to invest in.

In general there are two elements to a pension for a contractor -

1. There is a wrapper (in my case a SIPP) which is like a tax fee savings account - you (or your employer/LTD) pay contributions into it. There are limits on this and it can get complicated if you earn a lot of money (i.e. over about £120k per year) but in general the limit is £40k per year on contributions. When you contribute to this SIPP wrapper the money just sits there until you invest it in something that will make a return - that's element...
2. You can then invest amounts of the money in your SIPP account into a whole bunch of investments. Individual shares if you want to, or bonds, or some other classes of asset (like commercial property). Or you can in vest it in funds which in turn invest in stocks, shares, bonds, other assets (even gold, oil, etc.). Funds are meant to be a simple way for you to buy investments without needing to deal directly - with a fund you pay a fund manager to make those decisions for you and to manage the fund within a certain risk profile. However, there is no such thing as risk free (unless you buy government bonds).

Element 1 is simple and you could set yourself up now with a reputable SIPP provider (check the charges as a previous poster said) and pay money in. Element 2 (deciding where and how to invest your money so that it grows) is much harder. But I'd seriously suggest that you learn this and take an interest in your savings, learn about risk and what level you are comfortable with (respectfully I suggest you stay away from risk stuff and keep it simple to investment you understand until you have built you fund up).

Also don;t forget other ways of saving and investing - ISA's are good and you should always have a nice chunk of cash available in case you are out of work for 6 months. Spread any savings you have around and avoid some of the doom mongers who say all these ways of savings are scams by the government and you should throw everything into buy to let. On the savings front always put yourself around and be a tart. Finally, most important thing of all, remember to spend some money too so you can enjoy yourself now.

Good luck.

**Fred Bloggs** · 29 August 2016, 23:42

Just a slight word of warning. Whilst HL do in fact recommend some good funds, they only push funds when they have a reason to do so. Their reasons for pushing funds are not transparent, they have been asked about it and refuse to discuss with clients. Many funds pushed hard by HL turn out to be real duds (look up Psigma Income for example). Take their recommendations with large pinches of salt. As a starter for 10 look at the videos by Terry Smith on the Fundsmith website. In one of his videos he has a lot to say about HL and their HL 150. HTH.

**Cirrus** · 30 August 2016, 07:38

IFAs are like personal trainers. You don't need them for anything but if you are happy to pay someone to make decisions for you, why not?

Pensions - IFA or Private