| Self-employed/sole trader/freelancer folk... 14:58 - Feb 11 with 6403 views | monytowbray |
Pension options, what's best? I've been saving a cut of my income towards it and I really need to set one up. |  |
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| Self-employed/sole trader/freelancer folk... on 15:03 - Feb 11 with 4610 views | HARRY10 |
Why ?
At your retiement you will have an amount of money which you can either
Buy an annuity.... regular amount of money in exchange for that sum of money
or
use that money to add to any state pension
A pension can be a VERY expensive method as you will be paying caheges which can be quite heavy and will reduce what you 'put away' |  | | |
| Self-employed/sole trader/freelancer folk... on 15:05 - Feb 11 with 4597 views | itfcjoe |
People will tell you to go for a SIPP and manage it yourself, but realistically that's not the best idea without any expertise - just a standard stakeholder one with one of the big insurance companies will suffice in the short term unless you are planning to take a lot of interest in it |  |
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| Self-employed/sole trader/freelancer folk... on 15:08 - Feb 11 with 4589 views | StokieBlue |
| Self-employed/sole trader/freelancer folk... on 15:03 - Feb 11 by HARRY10 |
Why ?
At your retiement you will have an amount of money which you can either
Buy an annuity.... regular amount of money in exchange for that sum of money
or
use that money to add to any state pension
A pension can be a VERY expensive method as you will be paying caheges which can be quite heavy and will reduce what you 'put away' |
That totally ignores compounding and the fact that what you put into your pension is tax free at source.
In order to do it the way you suggest you'd have to pay tax on the money initially and then still put it in some form of risky vehicle in order to get the benefits of compounding.
SB |  |
| Avatar - IC410 - Tadpoles Nebula |
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| Self-employed/sole trader/freelancer folk... on 15:09 - Feb 11 with 4579 views | homer_123 |
| Self-employed/sole trader/freelancer folk... on 15:03 - Feb 11 by HARRY10 |
Why ?
At your retiement you will have an amount of money which you can either
Buy an annuity.... regular amount of money in exchange for that sum of money
or
use that money to add to any state pension
A pension can be a VERY expensive method as you will be paying caheges which can be quite heavy and will reduce what you 'put away' |
Pensions are one the most tax efficient ways of saving for retirement.
Yes, you do pay charges to administer your investment (why would you not pay for expertise?) which is more than covered with what the investment makes. |  |
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| Self-employed/sole trader/freelancer folk... on 15:09 - Feb 11 with 4574 views | homer_123 |
| Self-employed/sole trader/freelancer folk... on 15:08 - Feb 11 by StokieBlue |
That totally ignores compounding and the fact that what you put into your pension is tax free at source.
In order to do it the way you suggest you'd have to pay tax on the money initially and then still put it in some form of risky vehicle in order to get the benefits of compounding.
SB |
And, besides which, current savings/ ISAs etc. are incredibly low interest at the moment. | |
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| Self-employed/sole trader/freelancer folk... on 15:10 - Feb 11 with 4568 views | Vaughan8 |
| Self-employed/sole trader/freelancer folk... on 15:03 - Feb 11 by HARRY10 |
Why ?
At your retiement you will have an amount of money which you can either
Buy an annuity.... regular amount of money in exchange for that sum of money
or
use that money to add to any state pension
A pension can be a VERY expensive method as you will be paying caheges which can be quite heavy and will reduce what you 'put away' |
Assuming its a personal pension, surely you are getting an immediate benefit of the tax added (i.e. if you put £800 in, you get it topped up to £1,000) and if you are a higher rate tax payer you get your basic rate band increased (i.e. reducing the tax from 40% to 20%) to reduce your tax to pay?
That surely outweighs any charges, unless I'm missing something? I'm by no means a pensions expert so I could be. | | | |
| Self-employed/sole trader/freelancer folk... on 15:11 - Feb 11 with 4564 views | homer_123 |
Depends on what you want to do (how much you are investing etc.). | |
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| Self-employed/sole trader/freelancer folk... on 15:12 - Feb 11 with 4550 views | brazil1982 |
My partner has a SIPP with HL, investment going well. Do your own research on what funds to invest in, dont rely on the Investor's recommendations. | | | |
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| Self-employed/sole trader/freelancer folk... on 15:15 - Feb 11 with 4522 views | HARRY10 |
| Self-employed/sole trader/freelancer folk... on 15:08 - Feb 11 by StokieBlue |
That totally ignores compounding and the fact that what you put into your pension is tax free at source.
In order to do it the way you suggest you'd have to pay tax on the money initially and then still put it in some form of risky vehicle in order to get the benefits of compounding.
SB |
and you ignore that when you take it out is is taxed - which is not outside of a pension
the world is changing
final salary pensions are being ended, and the money purchase is becoming far less attractive in that climate
me - I took some 'odd' advice many years back, I did not hand over my money but chose to use it to lerarn another skill which has earned me, as as side line, way way above what that money would now be worth
as to compound interest that is a joke given the almost non existent rates of interest
you can plsn for the next few decades or stick to an outdated dated method | | | |
| Self-employed/sole trader/freelancer folk... on 15:18 - Feb 11 with 4503 views | Deano69 |
| Self-employed/sole trader/freelancer folk... on 15:15 - Feb 11 by HARRY10 |
and you ignore that when you take it out is is taxed - which is not outside of a pension
the world is changing
final salary pensions are being ended, and the money purchase is becoming far less attractive in that climate
me - I took some 'odd' advice many years back, I did not hand over my money but chose to use it to lerarn another skill which has earned me, as as side line, way way above what that money would now be worth
as to compound interest that is a joke given the almost non existent rates of interest
you can plsn for the next few decades or stick to an outdated dated method |
That's far from being a retirement plan.... |  |
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| Self-employed/sole trader/freelancer folk... on 15:20 - Feb 11 with 4492 views | StokieBlue |
| Self-employed/sole trader/freelancer folk... on 15:15 - Feb 11 by HARRY10 |
and you ignore that when you take it out is is taxed - which is not outside of a pension
the world is changing
final salary pensions are being ended, and the money purchase is becoming far less attractive in that climate
me - I took some 'odd' advice many years back, I did not hand over my money but chose to use it to lerarn another skill which has earned me, as as side line, way way above what that money would now be worth
as to compound interest that is a joke given the almost non existent rates of interest
you can plsn for the next few decades or stick to an outdated dated method |
You can take a 25% lump sum tax free so that's not right either. Given that will have compounded up it's likely more efficient than paying the tax upfront on the same amount (I'd need to be bothered to work it out though).
What relevance are the current interest rates with regards to compound interest? You aren't putting the money in a 0.5% account, you are hopefully earning 5-10% interest from the managed portfolio which where the compounding comes in.
It's very irresponsible to advocate to people not to take out a pension, especially if they don't have the required knowledge to manage their own portfolio.
SB | |
| Avatar - IC410 - Tadpoles Nebula |
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| Self-employed/sole trader/freelancer folk... on 15:25 - Feb 11 with 4475 views | monytowbray |
| Self-employed/sole trader/freelancer folk... on 15:11 - Feb 11 by homer_123 |
Depends on what you want to do (how much you are investing etc.). |
Currently putting away 4% of my income. It's just previously the companies I worked for put X% in on top of what I paid in, but now I don't know WTF to do or how it works. Just another one of several things I'm neglecting as I'm focused on keeping work/money flowing right now (I'm only 3-4 months into being freelance). | |
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| Self-employed/sole trader/freelancer folk... on 15:25 - Feb 11 with 4474 views | homer_123 |
| Self-employed/sole trader/freelancer folk... on 15:15 - Feb 11 by HARRY10 |
and you ignore that when you take it out is is taxed - which is not outside of a pension
the world is changing
final salary pensions are being ended, and the money purchase is becoming far less attractive in that climate
me - I took some 'odd' advice many years back, I did not hand over my money but chose to use it to lerarn another skill which has earned me, as as side line, way way above what that money would now be worth
as to compound interest that is a joke given the almost non existent rates of interest
you can plsn for the next few decades or stick to an outdated dated method |
25% tax free lump sum
Over the course of your pension, compound interest makes a huge difference.
In the last 5 years my Pension interest has been:
2015 - 8%
2016 - 10%
2017 - -3%
2018 - 4%
2019 - 19%
Compound that up and it makes a big difference, especially if you factor it over 10s of years. | |
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| Self-employed/sole trader/freelancer folk... on 15:25 - Feb 11 with 4473 views | Churchman |
| Self-employed/sole trader/freelancer folk... on 15:09 - Feb 11 by homer_123 |
Pensions are one the most tax efficient ways of saving for retirement.
Yes, you do pay charges to administer your investment (why would you not pay for expertise?) which is more than covered with what the investment makes. |
Spot on. I would add you are no longer committed to buying an annuity when you reach pension age. You can defer taking it, use drawdown (taking the money in stages while leaving the rest invested) or take the whole lot, through depending on the size of the pot this could well be a poor choice due to the tax hit.
When Stakeholder pensions came in 20 years ago, I took a small one out for er indoors to supplement her small work based pension. It’s proved very lucrative, despite the fees and even though the money was going into a relatively low risk plan. |  | | |
| Self-employed/sole trader/freelancer folk... on 15:26 - Feb 11 with 4466 views | monytowbray |
| Self-employed/sole trader/freelancer folk... on 15:03 - Feb 11 by HARRY10 |
Why ?
At your retiement you will have an amount of money which you can either
Buy an annuity.... regular amount of money in exchange for that sum of money
or
use that money to add to any state pension
A pension can be a VERY expensive method as you will be paying caheges which can be quite heavy and will reduce what you 'put away' |
I mean, "Why? You'll either be dead before 60 or retirement age will be 260 by the time you are old" would have been the more fitting :)
I have no idea what your post actually means to be fair. You're dealing with a n00b here. | |
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| Self-employed/sole trader/freelancer folk... on 15:27 - Feb 11 with 4460 views | Deano69 |
Standard Life have always been quite dependable and have reasonable rates. Not sure on the sums you are considering here, but at least get your money into an ISA while you decide.
If I could advise my younger self, it would have been to put more away having worked out roughly when to retire/ease off. I couldn't have predicted changes in the state pension age at the time, but it would have helped.
Lots of variables to give any better advice, stick with household names for at least a modicum of safety, lots of pension sharks out there, particularly if you are moving one... | |
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| Self-employed/sole trader/freelancer folk... on 15:27 - Feb 11 with 4462 views | homer_123 |
| Self-employed/sole trader/freelancer folk... on 15:25 - Feb 11 by monytowbray |
Currently putting away 4% of my income. It's just previously the companies I worked for put X% in on top of what I paid in, but now I don't know WTF to do or how it works. Just another one of several things I'm neglecting as I'm focused on keeping work/money flowing right now (I'm only 3-4 months into being freelance). |
That's sensible Callis - if you are struggling for time etc. the best advice I can give you is to go and speak to several Financial Advisors to do 4 things:
1. Look at your existing pension(s) and if you can consolidate into a single pension pot to make managing easier
2. Look at your existing pension(s) to also see if you can continue contributing to any (in that these might be a better investment than any new pension
3. Look to reduce admin costs of pensions
4. Provide you with a simple way to manage the above [Post edited 11 Feb 2020 15:30]
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| Self-employed/sole trader/freelancer folk... on 15:27 - Feb 11 with 4455 views | monytowbray |
I regret asking, I'm more confused!
Can anyone dumb this all down for me please? | |
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| Self-employed/sole trader/freelancer folk... on 15:29 - Feb 11 with 4437 views | homer_123 |
| Self-employed/sole trader/freelancer folk... on 15:27 - Feb 11 by monytowbray |
I regret asking, I'm more confused!
Can anyone dumb this all down for me please? |
Go and speak to a Financial Adviser bud....as per my post. | |
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| Self-employed/sole trader/freelancer folk... on 15:29 - Feb 11 with 4438 views | monytowbray |
| Self-employed/sole trader/freelancer folk... on 15:27 - Feb 11 by homer_123 |
That's sensible Callis - if you are struggling for time etc. the best advice I can give you is to go and speak to several Financial Advisors to do 4 things:
1. Look at your existing pension(s) and if you can consolidate into a single pension pot to make managing easier
2. Look at your existing pension(s) to also see if you can continue contributing to any (in that these might be a better investment than any new pension
3. Look to reduce admin costs of pensions
4. Provide you with a simple way to manage the above [Post edited 11 Feb 2020 15:30]
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Not bad advice to be fair, get someone else to do it :)
Also on my list is migrate domains from my current filmography one from when I did video freelancing on the side, get set up on https and sort out my business insurance.
I've been mega organised on tax and expenses by building an Excel document that does it all for me. F*ck I love spreadsheets. | |
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| Self-employed/sole trader/freelancer folk... on 15:30 - Feb 11 with 4434 views | WeWereZombies |
| Self-employed/sole trader/freelancer folk... on 15:09 - Feb 11 by homer_123 |
And, besides which, current savings/ ISAs etc. are incredibly low interest at the moment. |
Although a stocks and shares ISA should give a better return, but then there is an element of risk in that its value could also fall. |  |
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| Self-employed/sole trader/freelancer folk... on 15:30 - Feb 11 with 4433 views | factual_blue |
Contact Keno. |  |
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| Self-employed/sole trader/freelancer folk... on 15:33 - Feb 11 with 4406 views | Deano69 |
| Self-employed/sole trader/freelancer folk... on 15:25 - Feb 11 by monytowbray |
Currently putting away 4% of my income. It's just previously the companies I worked for put X% in on top of what I paid in, but now I don't know WTF to do or how it works. Just another one of several things I'm neglecting as I'm focused on keeping work/money flowing right now (I'm only 3-4 months into being freelance). |
One of the disadvantages of being self-employed I'm afraid (i have been for nearly 30 years).
In the same way I would hope you have a qualified accountant looking after your bookkeeping affairs, I would recommend the same for pension/investments.
The normally suggested scenario is a SIPP you can have control over. When there's enough in there you have the potential to buy commercial property and rent it back to yourself. Which is great if you need to rent somewhere to work from or have tenants guaranteed. Cant use it for housing though, has to be commercial. But quite a few options available and its certainly tax efficient if you have enough spare at the end of each month... | |
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| Self-employed/sole trader/freelancer folk... on 15:33 - Feb 11 with 4405 views | StokieBlue |
| Self-employed/sole trader/freelancer folk... on 15:29 - Feb 11 by monytowbray |
Not bad advice to be fair, get someone else to do it :)
Also on my list is migrate domains from my current filmography one from when I did video freelancing on the side, get set up on https and sort out my business insurance.
I've been mega organised on tax and expenses by building an Excel document that does it all for me. F*ck I love spreadsheets. |
You should really get an accountant.
Whilst it's perfectly possible to manage everything yourself in a spreadsheet the offloading of the stress and required knowledge to someone else for relatively little cost is well worth it.
You might benefit from applying for the flat rate VAT scheme and not bothering with expenses, once again for an easier life. An accountant could advise you on that.
SB [Post edited 11 Feb 2020 15:34]
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| Avatar - IC410 - Tadpoles Nebula |
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| Self-employed/sole trader/freelancer folk... on 15:35 - Feb 11 with 4383 views | hoppy |
| Self-employed/sole trader/freelancer folk... on 15:30 - Feb 11 by factual_blue |
Contact Keno. |
Is he the best bet to make sure to look after the penny's? |  |
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