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Think about your pension - ok, how?!

(13 Posts)
HandbagCrab Sat 01-Apr-17 09:15:14

I read lots of threads on here about people considering pt or sah and lots of replies ask people to not do so due to pensions and career progression.

I'm looking at setting up on my own whilst being a sahm. A new job which I'd need to carry on paying my pension and carry on my career would be full time and less pay than I've been getting so doesn't outweigh the negatives of never seeing my dc (this career requires long, stressful hours and is very tiring).

So how do you consider pensions if you don't have an employer one? Is there other ways of retirement planning? Has anyone used outside help, were they any good?

Is it unreasonable to think you can plan your retirement if you don't pay into an employer pension and to ask how people are doing that irl?

kath6144 Sat 01-Apr-17 10:57:39

You can open a personal pension with a lot of providers. Most refer to them as Self Invested Personal Pension (SIPP).

We invest via an online stockbroker, Hargreaves Lansdown, who offer SIPPs as well as ISAs and general share purchase. You can select a variety of funds to pay into and drip feed the money in monthly to overcome the ups and downs of the stock market.

You obviously wont have an employers contribution, but you will get tax relief (extra 20% as a basic tax payer). If you save for a long period (how old are you?) then you should build up a decent pot with investment increases.

Alternatively, you can put money into the same funds via a S&S ISA. This has the disadvantage that the govt dont add on tax relief, but the advantage that you can withdraw money if needed for any other reason, and it is free from tax when you do withdraw it (unlike pension money).

Meekonsandwich Sat 01-Apr-17 20:13:19

I would like the above poster said, whatever you would put towards a pension, put in an isa and don't touch it, you can get an is a that you can only get in once a year.

Do you have a mortgage? Our home is pretty much going to be our retirement fund. It's an investment after all.

HandbagCrab Sun 02-Apr-17 10:31:17

Thank you! I'm mid 30s and have paid into a 'gold plated public sector pension' for years which isn't worth a huge amount so I was concerned that if that was the best out there, I'd not have many options.

I'll look at a sipp and and s&s isa both of which I've never heard of so lots to find out about. We do have a mortgage and we were hoping our house might be worth more in the future but the area was countryside and is becoming industrial so I don't know anymore!

FishChipsAndBeans Sun 02-Apr-17 10:53:40

The problem with a SIPP is in the "self invested" part of the name; i.e. you have to be confident with investing and putting together your own funds. If you're not, then you could end up with a poorly diversified, very high risk product.

If you're not confident doing this, then you would be better getting a standard low cost personal pension instead with a ready-picked well-diversified product from a provider such as Aviva for example.

Have a look through the money saving expert pension/retirement forums - there are lots of posts on there about personal pensions and also SIPPs. Apologies if you're already comfortable with investing BTW smile

HandbagCrab Sun 02-Apr-17 11:14:44

I have no idea, this is why I thought to ask here as lots of posters are sahm or self employed and I thought they can't all be happily facing penury in old age.

I'd like to know about investing, is there a way to learn more about it or is it glorified gambling and to be avoided (I have an addictive personality)?

Allergictoironing Sun 02-Apr-17 11:33:22

It wouldn't really be advisable to self-invest unless you are willing and able to spend a fair bit of time researching how the stock market works, what the industry and political trends are at the moment etc. Most big insurance companies like Aviva, Zurich, Standard LIfe, Friends Life, Aegon, Legal and General, and Fidelity will have personal pension plans where you invest either a lump sum each year or a regular monthly payment. You put it into a standard plan (they often have a choice of 2-3 depending on your attitude to risk) which they manage for you.

You are limited in what you are allowed to put into a personal pension each year if you are unemployed - currently £3,600 a year at the moment I think. try having a look at the Pensions Advisory Service which will give you a better idea of your options.

FishChipsAndBeans Sun 02-Apr-17 11:34:39

The Monevator blog is a good site for learning about investing: monevator.com

A good book on passive investing is Smarter Investing by Tim Hale.

For the very basics of retirement planning and the basics of investing, try Plan Now Retire Happy by Alvin Hall. It's a few years old now, but still contains excellent and relevant advice.

sashh Sun 02-Apr-17 11:41:48

I receive a pension due to ill health, I will also get a 'full' state pension.

I have a sipp with a few thousand pounds from previous short term jobs where I paid in, you can't get at the cash but you can transfer it so I transferred it into a SIPP, also with Hargreaves Landsdown.

It is something I 'play with' but it is now worth double the amount paid in 5 years ago.

I would not do this with a sole or main pension, I don't know enough, I am aware I could lose all the value. Assuming it's there when I retire it will probably be taken as cash.

You also have the option of NEST which is the government scheme and I have a small amount in a stakeholder pension too.

SpottedOnMN Sun 02-Apr-17 11:52:08

I have a Hargreaves Lansdown SIPP and ISA. They have lots of information on there.

My SIPP is split between an extremely highly rated by HL investment fund (CF Woodford Equity Income) and a tracker with lower fees (HSBC FTSE 250 index). Actually the tracker does pretty much as well as the fund and costs less so I think it's a fairly safe option. I've seen a lot of advice to invest in trackers, notably this article: www.telegraph.co.uk/finance/personalfinance/investing/10697393/Warren-Buffett-my-perfect-pension-portfolio.html

Personally I don't follow Buffet's advice to invest in gilts because I'm relatively young and trust that over the long term the stock market will rise. As I get older I might move money into gilts.

Most funds and trackers have an income version and an accumulator version. You want the accumulator version so your income is automatically reinvested to grow your pension pot.

SpottedOnMN Sun 02-Apr-17 11:53:09

Note for those who don't read link - Warren Buffet only advises putting 10% of your portfolio in gilts!

SpottedOnMN Sun 02-Apr-17 11:54:53

And I just noticed I've been misspelling (and consequently mentally mispronouncing) his name for years!

HandbagCrab Sun 02-Apr-17 17:29:45

Thanks so much for the info - lots to think about smile

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