Pension for self employed

[FruitBadger]

DH needs a pension, I'm the one who sorts out the financial side of life and I'm going round in circles too worried about making the "wrong" decision.

He's self employed and nearly 40. No pension at all currently. We can invest c£3,000 now and probably £100 per month ongoing, potentially occasional additional amounts. He's a basic rate taxpayer.

I can't decide between a Stakeholder pension, which feels more within my comfort zone or a SIPP which I find slightly daunting as I don't have the knowledge or time to be able to actively manage what is invested where.

I can't find a list of Stakeholder pension providers to compare them, so don't know how to start with that. And I've read the guides on Money Saving Expert about SIPPS and just feel overwhelmed.

Is anyone able to help me narrow down the field? Ideally, we'd like to get it set up & the lump sum paid in before the end of this tax year.

What sort of ballpark is your household income and what kind of income are you hoping to get when he retires? £100/m seems very low to me. I started a pension at 40ish and I am putting in about £400 a month and am expecting the resulting pension to be pretty modest (but this will be ok as DH has a decent one via his employer)

The thing to look at is the fees - different plans will have different rates and your investment growth might end up disappointing once fees are subtracted. You don't need to look at SIPPs if you don't think you will be doing much active management- there are plenty of managed personal pension funds that you can put your money into and on the scale you are talking about there isn't a huge amount of significant difference between them - whichever you choose will grow broadly in line with the economy and the difference between where you will be after 10 years with plan A vs plan B will be really not that much. After those 10 years once you have built up a decent lump sum ot might be worth trawling through information on the best ways to reconfigure the investments for the subsequent 2 decades, but such effort would take more time than the value that the work can possibly justify when you are just starting out.

Sadly those figures aren't really going to add up into anything like a worthwhile pension unless the monthly amount can be increased substantially in future years.

Maybe best just to save it in an ISA instead to at least keep the flexibility?

I'm self employed and just use a stakeholder pension. It is worth putting money into a pension rather than an ISA as the governments adds the tax back so if you put in £2880 they top it up to £3600. It goes by tax year so worth getting the £3k in asap to use this year's allowance.

SIPPs I don't know that much about but think it just allows you more control over what its invested in than a stakeholder but normally charges higher fees and you can invest in more assets classes like gold than with a stakeholder. If you are not experts on investing I would go with low fees.

This gives a guide:

www.money.co.uk/pensions.htm

There are a number of good episodes about pensions on the meaningful money podcast - very accessible (well I found them very helpful!). Worth a listen to help you think through the options. For eg:

meaningfulmoney.tv/2013/06/05/mmp013-making-sense-of-pensions-podcast/

Vanguard operate an interesting pension package for those who want a SIPP but don't have the time to actively manage investments. Choose the year you aim to retire and set up your payments. In the early years your investments are more towards equity, less into bonds. That balance changes as you get closer to retirement in order to protect your money. The fees are some of the lowest around.
Their website is very clear.