Should I continue my private pensions now I have a Ltd?

[Bumfluff]

What you want in your situation is a personal pension making company contributions (or possibly personal contributions). You can make both personal and company contributions into a personal pension. You will be able to keep your personal pension and contribute to it throughout your working life.

Given the changes in tax rates in April it might be a good idea to set up a personal pension making company contributions after 6th April and make a lump sum personal contribution before April.

Cheers Minstrel thanks for helping me understand

Setting up a pension has been bugging me for ages, I went to see my own bank (a mistake) and they never told me the basics and thats what I needed.

[minstrel]

Cheers Minstrel thanks for helping me understand

Setting up a pension has been bugging me for ages, I went to see my own bank (a mistake) and they never told me the basics and thats what I needed.

No problem. If it's any help I've got a SIPP with Hargreaves Lansdown and I've found them to be very good.

I'd steer clear of High Street banks - they rarely do the best deals.

[Lewis]

I think that what you've missed is that from April there will only be 20% tax relief on pension, as the basic rate of income tax is going down to 20%. So "ultimate pension payment" for 2008/2009 is £987.50 and for 2009/2010 is £975.

Ah right. Thanks for that. I will arrange for company to pay pension post April. I do like this forum :-)

[IR35 Avoider]

I was mainly thinking about it from a risk point of view, ie having multiple pensions is not putting all your eggs in one basket. Is that no different than having one pension split into multiple funds?

I had assumed that pensions, like other investments, are covered by regulation and insurance schemes, which would help if someone ran off with the money. Actually, I don't know, so I'm going to check.

Edit: I think pensions are covered by the Financial Services Compensation scheme, but only up to £50,000, so it may be worth having more than one. (Actually I'm surprised the cover is so low - I'm sure documentation I've had in the past told me I was fully covered.)

http://www.fscs.org.uk/

2nd Edit: I'm glad you raised this, because it has triggered me to check something that was worrying me. Recently I read something that raised the distinction between "insured" pension schemes and "trust-based" schemes for compensation purposes. The fact that I've just moved from Legal & General to Sippdeal means I've moved from one to the other.

I've gone back to L&G Stakeholder key facts, and what they say about compensation ties up with what the FSCS web site says about the compensation limits for insurance products. The first £2000 is completely covered, and the rest is 90% covered, with no upper limit.

So I think the £50,000 limit only applies to trust-based schemes.

It looks like I will have to move some of my Sippdeal funds back to an insured scheme, at some stage. (I only wanted to move to Sippdeal to take advantage of a short-term opportunity, I was happy enough with L&G as a long-term home.)

[SueEllen]

I had assumed that pensions, like other investments, are covered by regulation and insurance schemes, which would help if someone ran off with the money. Actually, I don't know, so I'm going to check.

They are now regulated.

http://www.fsa.gov.uk/

[ashleymoran]

http://www.fscs.org.uk/

2nd Edit: I'm glad you raised this, because it has triggered me to check something that was worrying me. Recently I read something that raised the distinction between "insured" pension schemes and "trust-based" schemes for compensation purposes. The fact that I've just moved from Legal & General to Sippdeal means I've moved from one to the other.

This has prompted me to investigate my pensions. The one I have with the Co-op is an Individual Personal Pension Plan not a Stakeholder, and the T&Cs contain this line:

10.4 ... The Member has no rights to any of the assets of the Fund.

There is no mention (that I can see) of transfers out of the pension, so now I am wondering if I've tied my money up. As it happens, it's worth less than £1500 so it's not a big deal. I will check if I can transfer the funds, and if not, I will freeze it and open another Stakeholder.

I didn't realise that pensions could be made non-transferrable like that. Did I just interpret the T&Cs wrong?

Thanks for the research about fund insurance. I will know to watch out for that. When I have a fund worth 50k anyway!

[IR35 Avoider]

This has prompted me to investigate my pensions. The one I have with the Co-op is an Individual Personal Pension Plan not a Stakeholder, and the T&Cs contain this line:

10.4 ... The Member has no rights to any of the assets of the Fund.

There is no mention (that I can see) of transfers out of the pension, so now I am wondering if I've tied my money up. As it happens, it's worth less than £1500 so it's not a big deal. I will check if I can transfer the funds, and if not, I will freeze it and open another Stakeholder.

I didn't realise that pensions could be made non-transferrable like that. Did I just interpret the T&Cs wrong?

Thanks for the research about fund insurance. I will know to watch out for that. When I have a fund worth 50k anyway!

I don't think the phrase you quoted means you can't transfer. I think it is telling you that what's inside a pension isn't legally owned by you, which is correct for all pensions. This is why "your" pension savings (usually) can't be taken to pay your debts if you're made bankrupt.

I think all personal and stakeholder pensions have to allow transfers.

[IR35 Avoider]

What happens if you think your outside of IR35 and you make all your contributions from your divs, and then the IR say your not outside IR35 and your owe X amount, would they consider what you paid into pension or would you have to find the money to pay them back ?

First, to make things simple, just get a personal or stakeholder pension, and pay company contributions.

With regard to IR35, it's only company contributions that matter, as only they reduce the deemed payment.

[adder]

If I set up a SIPP can I transfer any of my 3 existing pensions (from a couple of permie jobs and 1 from an old Ltd company) into this?
TIA

[IR35 Avoider]

If I set up a SIPP can I transfer any of my 3 existing pensions (from a couple of permie jobs and 1 from an old Ltd company) into this?
TIA

Probably, but for the permie ones you need to read the small print to make sure you're not losing out by doing so.