Starting a pension as a non-earner - flummoxed by options!

[Flummoxedpebble]

Honestly, I’m frustrated with myself and embarrassed. How could I have reached my fifties without any private pension. When I read up about it I become overwhelmed with information and frankly how I’ve left it too late.

So, relevant info-
I was a teacher briefly 30 yrs ago, so I imagine there may be a tiny TPS amount?
Then single parent, temp low paid jobs, carer for elderly relative. No pension, just getting by has been the focus.
Then hit by ill health, so briefly on ESA, now migrated onto Universal Credit (not for long, looking for suitable jobs).

I understand as a non earner I can contribute £2,880 to a pension and this is not taken as savings or deprivation of capital by UC. So, do I open a SIPP with someone?

I’m not savvy enough to manage my own investments but happy with a medium/high level of risk and wouldn’t want to touch it for 15years. It’s such a small amount that I imagine fees could have a major impact on it.

Id be so grateful for step by step advice, how do I open one, can any other non earners recommend something? Thanks.

First things first. State pension. Do you have any gaps in contributions to this since 2006? If so, you can fill them now but there's a short time.limit - I think it closes in April. You should have some years filled by claiming child benefit, but make sure you have been credited with those.

Then look at topping up with a private pension. You can indeed put in £2800 a year, and this will be topped up automatically with the tax releif (even if you don't pay tax).

As it will be a small amount the key thing is fees - these eat away at your investment so you want to keep them low. Places like MSE and Monevator will have tables showing who has the lowest. Platform fee and fund fee are most important. Dealing fees you have more control over by doing fewer deals.

Once you've found 2 or 3 that look promising, go and rummage on their sites - see which you find easy to navigate. Most will have a selection of pre-made pension investment packages at different risk levels.

You can always move investments or providers later, so don't overthink it. Pick one that's 'good enough' and get it open before the tax year ends so you have the full allowance for this year and next.

NoBinturongsHereMate thanks for replying. I checked my State Pension in case I needed to top up before the deadline and I’m okay there. One thing sorted!

You were spot on with ‘don’t overthink it’. As soon as I start to research different sites and products I’m lost.

There must be many other SAHM/ others not currently earning for different reasons in the same boat.

Vanguard used to be the go-to recommendation for beginners - they have a limited range of options on their platform so it's not as confusing as bigger ones. But they recently put their fees up for smaller accounts.

A J Bell https://www.ajbell.co.uk/pensions/sipp/charges and Fidelity https://www.fidelity.co.uk/services/sipp/ both look OK on the fees for smaller pots. And both have some ready-made investment packages to get you started.

Thankyou, I will look at both of those

Dodl from AJ Bell is their cut down low cost app based investment platform, so if you are comfortable using app only, then look at Dodl.

If you worked in a state school 30 years ago ish you would have been auto-enrolled in the pension scheme without being asked. It's worth contacting the TPS company and getting a log in to check up on your record as they will show you what pension you have accrued in the time you worked. Even if you then didn't pay in more, it would have increased with inflation over the years and may be worth more than you expect.

You could look at Target retirement type funds. These are mixed investments which get more conservative the closer you get to your chosen retirement age. You get automatic tax relief to take it up to £3600 per year.

Thankyou all, I will look at those too. It’s so helpful having some direction.

Good suggestion to check with the TPS scheme as well. I can only guess it’s tiny but anything is better than what I have at the moment !

I have my pension with AJ Bell and have found them pretty good. Fees are ok, they have ready made portfolios if you want these, and I've found their phone support very helpful. They won't give you any investment advice over the phone, but their website has some guidance and their account support is good.

Nutmeg pensions are really easy to set up and you don't have to pick your own funds.

Have a free call with Pension wise. I have a self invested personal pension with Vanguard. I watched a few videos from the meaningful money community or something like that to help me pick funds. Compound interest is your friend so it's definitely still worth it.

Thankyou for the tips, I’m investigating all!

Before filling any gaps you may have in your state pension listen to Moneybox on BBC Sounds they had an article yesterday on this saying that it may not be the best thing to do and that the gaps may be filled anyway.