Apologies if this is going over old ground on another thread. I have recently joined an employment agency and wanted to set up a salary sacrifice to make some additional payment into a pension. I am a bit bemused by the whole finance sector (my previously shared forays into Crypto will indicate my extremely limited and unwise investment prowess), as such the umbrella company have advised that I can choose from a list of approved pension providers, that they will agree to. The list is as follows:
Aegon
AJ Bell
Aviva
Fidelity
Hargreaves Lansdown
Interactive Investor
Old Mutual Wealth
Pension Bee
Royal London
Scottish Widows
Standard Life
St James Place
Transact
So that's my lot to choose from. Clearly I will need to choose one and then I suppose ask the right questions. I've never set up a pension myself, only even had NHS or local authority etc so have no clue as to where to go from here. If anyone has a basic answer for a basic person, then that would be great. I only want to put maybe £500 pcm into the pot. Don't know if the amount is relevant. As said I'm pretty hopeless in this field and don't want I waste time or money unnecessarily.
Oh I'm North of 50 and an Addick, thus already have a nervous disposition, so please be kind. 😬
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In terms of what to invest in, the usual advice is that as you get older (i.e 50+ counts as older) you put more of the pot into steady assets like bonds (say 75%) and the rest in less steady assets like shares.
Disclaimer: I'm not a financial advisor, not even close.
I'm sure experts on here will correct me if I'm wrong
Interactive investor gives you pretty good market access and low fee's, especially once your pot gets to a certain size. Ditto Fidelity, but fee's will be higher longer term.
Do not touch St James place!
https://www.yodelar.com/insights/st-jamess-place-review
Any IFA’s on here?
Personally I wouldn't touch them. Not saying the individuals are dodgy or anything, but why would you tie yourself to advice from someone effectively only selling products from the company that employs them?
Your advisor is not Independent (The I in IFA).
And then there's this, more recent article. According to the FT the FCA stepped in and put some pressure on fee reductions. The rest of the article does not make for happy reading either. https://www.ft.com/content/cba1f8bd-1ac0-4203-99e5-3be0e5ae9b42
A cynic might suggest there's a reason why tied advisers like being tied advisers with SJP.
First thing I would say is that the umbrella company don't know anything - Old Mutual changed their name 3 years ago !! Also, in that list of names you have traditional pension companies as well as Platforms - a right hodge podge if you ask me.
I'm not touting for business but you really need advice from a regulated pensions adviser.
Absolutely criminal.
The other usual piece of advice is that past performance is not a guide to future performance.
And I agree: best to seek professional advice.
I would say though that whether NEST is the best place to invest further into a pension is something you’d need to discuss with an IFA.
If the employer can take out before you receive your pay (i.e. salary sacrifice) then yes this is before Tax & NI, worse case if you simply paid into a private SIPP you have to enter on your tax return, but you won't save NI. I do this in addition to my employee pension.
If people are happy to use SJP then that's up to them, just be ware of at least the investment fee structure. Exit fee's, 4.5% initial investment fee etc.
In the absence of knowledge, stick to mainstream insurer like Standard Life. St James are parasites and other big intermediaries will recommend what justifies their existence on the most profitable basis.
I always choose passive/index linked funds, fees can be 4 times and more cheaper than actively managed funds. Higher fees for fancy portfolios constructed by an adviser will not deliver out-performance that covers higher fees - except by chance. Statistics prove it.
Passive global equities give cheap simple diversified exposure to equities for the prospect of long term returns above inflation Attempting to second guess what specific funds from the thousands available will out-perform over any period is futile, but gives advisers justification for giving advice.
My wife has a bit of money with Redmayne Bentley and me with True Potential, both retirement funds. Nothing much but various pensions moved for various reasons. Over the years all 3 companies have done a job we couldn't of done because neither of us have the knowledge or understanding of long term investments. The only bit that was hard bit was the set up fees but I think thats something that has to be paid.
What is the biggest umbrella you have?