Pension and medical insurance

[sallyandmoney]

I'm 46 and no pension. I have £20k saving in ISA and that's it. How could I start from here...?

I thought of SIPP but scared by taking any sort of risk... My friend suggested I should ring Scottish Widows but then they have worryingly bad reviews...

Also I was wondering if I should consider medical insurance. In my native country, it's very unusual not to have any medical insurance, especially at my age. It's not the case in UK?

Is there any expert on the subject? Help me please...

[nannynick]

Do you like listening to audiobooks? If so then explore podcasts... there are several UK based podcasts that tackle the subject of pensions and other aspects of personal finance.

Try this series: meaningfulmoney.tv/category/podcast/season-11-pensions-masterclass/

A stakeholder pension can be cheaper than a SIPP but you do need to look at fund choices and the fees.
Vanguard who are known for low cost index funds are launching a SIPP in 2020 which will be worth a look.

When you say ISA you probably mean Cash ISA. For retirement investing look at Stocks&Shares ISA. You do need to take risk - you may find it helpful to try to establish your risk tolerance.

[Panicovereveryone]

A stakeholder pension can be cheaper than a SIPP but you do need to look at fund choices and the fees True, but only if you have a VERY small pot.

A personal pension is cheapest of all these days. Look at Aviva and use their planning tools

[sallyandmoney]

Thank you for the posts, nannynick and Panicovereveryone. I'll try to listen to the podcast you recommended.

When I looked at SIPP, it said you should use a SIPP only if you have a large pension pot which I don't. It also continued to say that SIPP would be only suitable for experienced investors who are comfortable with taking investment depictions which, again, I'm not. So probably no SIPP at least for now then.

I understand a stakeholder pension is less riskier than a personal pension (SIPP?). So that may be the start line for me... What is 'standard life'? I was recommended to look at it by someone.

How could I move from Cash ISA to Stocks&Shares ISA? How could I choose the provider? Currently I have Cash ISA and Fixed ISA with Santander....

[Panicovereveryone]

I understand a stakeholder pension is less riskier than a personal pension (SIPP?). So that may be the start line for me... What is 'standard life'? I was recommended to look at it by someone
That’s not correct. A stakeholder pension is all about control of charges introduced in the industry.

Standard Life is an insurance company, just the same as Aviva. Either can do a pension. I prefer Aviva, but check the charges of each.


Ask Santander if they can offer you a Stocks and Shares ISA. Again ask about charges.

You might find a company like Nutmeg or Pensions Bee are better for you as they will make choices for you.

[sallyandmoney]

Thank you, panicovereveryone. I'll check Aviva, Nutmeg, Pensions Bee and ask Santander about stocks & shares ISA.

I have a 53 years old husband who has built up a sizeable pension plan (about £400k). When I heard my friend's husband started paying for her pension to pay less tax, I asked my husband if he could do the same for me. He agreed but later came back to tell me that rather than him paying in to my pension it's more tax efficient for him to increase the amount of pension he pay to his existent pension fund so he's putting an extra £200 per month from this month instead.

At first I accepted his suggestion but I'm still not sure what change that's made to my own no-pension situation. He says it covers both of us. But my understanding is we all should have our own. Otherwise why my friend's husband started paying for his wife? Why are there many people doing for their low or zero income partner?

It's not that I don't trust my husband but he often says something very confidently without checking the details. Surely he and me aren't equal to benefit from his pension pot?

[Panicovereveryone]

If he has a money purchase pot and is a higher rate tax payer, he’s correct in so much as the tax he gets back could be greater. I’m assuming you are a basic or none tax payer.

What is doesn’t do is maximise the possible flexibility of having 2 pots. It doesn’t take into account that if you have no pension your unused personal tax allowance is wasted when you take your pension.

There are nuances to this too. Your friends husband may max out his pension, he may not have any life time allowance, he may have triggered the MPAA.

Comparing financial solutions is fairly pointless as everyone’s situation is different.

If you have income you should certainly save into a pension. If you have no income saving £3600 gross is likely to be of equal benefit as saving into your husbands and more beneficial for flexibility. I think he’s missed a few nuances here.

Without wanting to be a misery, £400k is ok, but he needs to keep saving. That would represent about £20k a year of income between you.

[whiteroseredrose]

If your DH is a higher rate tax payer and you are basic rate then it is more tax efficient for him to pay into his own pension as the contribution comes from pre tax income.

However that doesn't mean that you shouldn't have your own pension.

Do you work? If so your employer should have a pension scheme and may also match your contributions to a level.


Also you're confusing a SIPP with a personal pension. A SIPP is a self invested personal pension so yes, you would need to understand about investing and risk and reward and then decide where to put your money yourself.

The alternative is to go to a financial adviser who can recommend a pension for you and thereafter fund managers look after the investments.


You can look on unbiased.com to find a financial adviser near you. My advice would be to call a few because there is a vast difference in what they charge.

[Panicovereveryone]

f your DH is a higher rate tax payer and you are basic rate then it is more tax efficient for him to pay into his own pension as the contribution comes from pre tax income

That’s not necessarily correct though. Yes superficially, but not in all situations.

[Panicovereveryone]

Oh and I’m a pensions adviser

[sallyandmoney]

Panicovereveryone, you are correct. I'm not a tax payer as I don't make much money. I'm hoping to increase my working hours probably from May but it's not certain yet. So I'm almost no income currently. I often here this government top up to £3600 pension scheme for low or no income people. Where can I set up the saving like this??

So you would suggest I should set up my own pension pot rather than increasing the amount to put into my husband's one, for the flexibility of having two pots? I need to talk to him about it again... He is hoping to double the amount in his pension pot in ten years time. I'm not sure if it's realistically possible or he's just dreaming, though he built up from £60k to £400k in the last ten years. Hope his plan works.

I suggested we should see a financial advisor but he said 'not yet'. But isn't it better to get a professional advice before it's too late? There are age limited products for instance..

[Panicovereveryone]

Any personal pension will take your £3600 (you pay in £2880 and get tax credited for the rest). It’s a rule rather than a product.

If you do earn more and save more that’s good. Check your NI record too as if you’re not paying NI or receiving credits you’re not earning state pension either.

[sallyandmoney]

So any company who provide personal pension can offer the I pay in £2880 and get tax credit for the rest plan? Could I just approach a company like Aviva and tell them I like to set up the plan for me?

The first thing I did once I started thinking of my pension was to contact HMRC to check my NI record. Thankfully I've got 21 years qualifying years. Now I'm thinking if I should pay voluntary contribution for this year (class 3) or wait till I get a job (class 1) or become self employed (class 2). As you know, class 3 is almost 5 times more than class 2... I'm planning to register myself as self employed after May so if I decide not to pay NI until then (to avoid paying nearly £800 of class 3 fee) it'll be only one year.

[Panicovereveryone]

To set up a pension you’ll need to make some payments so your £240 per month will be your £2880 per year. Making it monthly is better as it averages out what you pay for the units you buy.

If you have 21 years, you need another 14 for a full pension. That seems possible so no I wouldn’t worry for now. You will have the option to pay the missing period later (for up to 6 years).