New Contractor. Pension recommendations?

[Sambola]

Hi everyone,

I was wondering if there was a pension company recommended for contractors, or that you guys personally recommend?

I'm new to contracting, and had a search of this forum but can't find exactly what I'm looking for.

Thanks!

[MrButton]

There’s a sticky thread right at the top. Give that a read and see if it helps.

[Cirrus]

I recommend setting up a SIPP and then shoving in whatever you fancy every year. It's just a bank transfer and shows up on the costs side of the Balance Sheet, so zero tax (up to the current annual limit, which is probably £40k). You have to choose what you want to invest in. If you can't be bothered just pick Vanguard 60 or 70% equity. On his death, Warren Buffett has instructed his trustee to convert most of his wealth into an index-tracker fund with Vanguard, saying: “I believe the trust’s long-term results from this policy will be superior to those attained by most investors who employ high-fee managers.”

Vanguard are supposed to be introducing a SIPP product this year. I would hang on because they will be cheaper than the rest. If you don't want to wait, Hargreaves Lansdown are used by lots of people although they are probably more attractive if you like to pretend you're a city trader.

[vwdan]

Went through this whole rigmarole this year and "What Cirrus said", except I went for high equity for now.

I was advised to look at some cheaper platforms but had a couple of bad experiences, including one who accidentally sent me a filled in application form for somebody else - complete with NI number, DOB, bank details etc etc.

In the end I went for the often recommended HL and they've been great - really great to deal with and a good online platform. Also very very easy to transfer other pensions in. I think most SIPP providers have the "Pretend to be a trader feel" - you just have to look past that.

All a bit overwhelming at first for me as I've no experience with such things, but now I've got it set up it's fine. Again, as Cirrus said, paying in is as easy a bank transfer or even an online debit card payment.

On investments themselves, I do recommend the book Smarter Investing - but it ultimately comes down to the same thing - forget playing the market yourself, forget paying someone to play the market, stick to well respected index trackers

[Cirrus]

For HL, you set up an account.

Then you send an email to [email protected] like this:

Hi

Client No; 2121212
Employee: Daniel Volkswagen
NI: YP666666A

Company:
Volkscon Limited
77 Sunset Strip
Plumstead Episcopi
Dorset

Amount £20,000
This is a gross employer contribution.
The funds are from a Volkscon Ltd bank account



Daniel Volkswagen
Director
etc

Then you send the cash.

It duly appears (as cash in your portfolio page) and you can then buy into whatever funds, shares etc you fancy.

[northernladuk]

If you are new to contracting you could do with putting the pension on the backburner until you've built a warchest up that covers 6+ months of money at your current burn rate in case you can't get you 2nd and 3rd gigs quickly.

Once you've got this buffer then you can start thinking about a pension. You can put a lump sum in just before the year end so there is no rush to set this up.

[nobody123]

Hargreaves Lansdown SIPP is the way to go

[Spoiler]

Waiting for Vanguard to bring out their SIPP, will then transfer existing pension to that.

[fiisch]

Sorry, I may be being thick here, but to confirm - are we saying that you can contribute directly to a SIPP from a limited company?

I was under the impression you could only pay into a SIPP from post-tax earnings? (Or am I still thinking like a permie.... ?!)

[Fred Bloggs]

Sorry, I may be being thick here, but to confirm - are we saying that you can contribute directly to a SIPP from a limited company?

I was under the impression you could only pay into a SIPP from post-tax earnings? (Or am I still thinking like a permie.... ?!)

Yes, correct.
No, wrong.