Pension. Please guide.

[sammy2020]

Hi,
Can someone please guide me about Pension. My accountant is insisting on me talking to Pension advisor but I don't want to pay commission to pension advisor when I know where to invest. But don't know how.

I started contracting only from Jan 2020 and has workplace pension from Fidelity from my permanent job earlier and happy with them. It is showing 9.5% dec to dec return. I called them but they couldn't guide me much.

i am new to contracting. I have £65k in my bank before corporation and income tax and this quarters VAT. Plus expecting approx 20k for Nov and Dec. Didn't take out any money as living on savings in personal account. Not saving much tax as expenses were minimal and lazy about all financial matters. I get £9500 salary through company but not taken out any money.

What different kinds of pensions a contractor can invest ?
Can I invest £40k in pension despite £9500 salary and save tax on £40k?
Which pension can I invest in - personal or company pension or SIPP?
Planning to add spouse as employee because of recent unemployment. Can I take pension in both of our names?
What do people normally invest into? any experiences will help.

Please help. SOS!!!

[cojak]

Read this thread. https://www.contractoruk.com/forums/...d-company.html

Oh, and we are NOT pension advisors. If you don't want to pay for an IFA, you're going to need to make your own decisions.

[Fred Bloggs]

Further to what cojak says, self invested personal pensions are ideal for contractors who by nature tend towards doing their own thing. Abbreviated to SIPP, all the major retail investment platforms offer them. The two I recommend to newcomers is AJ Bell for smaller pots and Interactive Investor for larger pots. The reason is the way they both charge is different. Both are good options. You can hold shares, funds (including trackers) and investment trusts in those accounts. You will need to set up the account yourself, dead easy and free. You will need to choose your own investments, not so easy but still free. I suggest you look at those options first and download the fact sheets about what a SIPP is and how it works in addition to the providers charges details. These days they are pretty transparent and easy to understand. Both those providers offer information on building a portfolio for different levels of risk. But the decisions are yours. Yes, you can pay up to £40,000 into a pension, from your company, probably the most effective way to fund your pension.

Finally, I suggest you avoid all advisors and especially anyone who styles themselves a wealth manager. The wealth they manage is their own, rather than yours. Hope that helps. Beyond this, there is already a long thread here about pensions you may choose to now read.

BTW, this is not advice, it's information.

[jamesbrown]

Since Vanguard came to the UK, it’s a no brainer IMHO. Extremely cheap, excellent. Yes, 40k is your annual allowance for now and up to 160k with the carry forward rules, assuming you had a personal pension open in the last three tax years.

[Fred Bloggs]

Since Vanguard came to the UK, it’s a no brainer IMHO. Extremely cheap, excellent. Yes, 40k is your annual allowance for now and up to 160k with the carry forward rules, assuming you had a personal pension open in the last three tax years.

Which is fine if you only want Vanguard funds, and some people do. I advise the OP to look at the two platforms I mentioned and then consider Vanguard as well if being restricted to their funds appeals. Nothing wrong with Vanguard funds or Vanguard per se, but they aren't for everyone. For the benefit of the doubt, the two platforms I mentioned deal in Vanguard funds too, as well as everything else.

[jamesbrown]

Which is fine if you only want Vanguard funds, and some people do. I advise the OP to look at the two platforms I mentioned and then consider Vanguard as well if being restricted to their funds appeals. Nothing wrong with Vanguard funds or Vanguard per se, but they aren't for everyone. For the benefit of the doubt, the two platforms I mentioned deal in Vanguard funds too, as well as everything else.

Just make sure you compare them carefully, including all platform fees. Nothing wrong with AJ Bell or similar per se, but you need to consider the overall fee structure. There is no cheaper way to invest in Vanguard funds than via their platform, I think, and they have a good range of funds. Unless you’re a sophisticated investor (the OP sounds like they want a simple solution), they are very tough to beat, which is why they compare extremely favourably with other platforms in industry reviews. Remember, a large chunk of profit disappears in total fees over time.

[BrilloPad]

With an adviser you will get more money overall. They will make better decisions than you and earn you more than their fee.

AYCOTBAC?

[malvolio]

I used a wealth manager. The fund is growing at around 5% a year despite me taking a regular pension out of it. The trick is to get a good, honest one that covers the whole market.

And no, I'm not telling.

[saptastic]

Try here: Contractor pensions advice and worth contacting a specialist to get there advice and as BP says may earn you more money in the long run.

[jamesbrown]

may earn you more money in the long run.

OTOH, they will certainly cost you more money, generally much more.