Which pension scheme to use for self employed?
- Thread starter chris_o
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Mate and I had a chat about this and figured it's better doing one or two buy to lets and having that as your passive income versus pension as there won't be **** all money for our generation when we retire anyway. Just my two pence.
Not arrogant at all mate, a wise decision. Mate and I were happy with our passive income from BTL buffering potential savings in future old age and haven't taken the time to investigate the pension schemes. I was put off because it seemed a fair amount to understand and as I understood it an element of risk involved. Sorry I can't be more helpful, hope someone will chirp in for you that can.
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as an aside
buy to let now has the problem that people on benefits whoes housing that would pay all or most would be paid direct to the landlord is now paid irresponsibly to the claimant who often dont have the where with all or ability to balance the books accordingly just so they can demonize them by saying they claim xyz on benefits or up to around £240k including housing
now this is because social housing has been sold off cheap without a greater amount off housing being built so the excessive costs are fully the governments fault both labour and cons for selling off cheap and not building new
i dont actually blame anyone for right to buy or buy to let but just remember it aggrivates the social housing bill and condition
in other words your profit costs everyone perhaps 2 or 3 times more than social housing would cost if owned by the housing association
buy to let now has the problem that people on benefits whoes housing that would pay all or most would be paid direct to the landlord is now paid irresponsibly to the claimant who often dont have the where with all or ability to balance the books accordingly just so they can demonize them by saying they claim xyz on benefits or up to around £240k including housing
now this is because social housing has been sold off cheap without a greater amount off housing being built so the excessive costs are fully the governments fault both labour and cons for selling off cheap and not building new
i dont actually blame anyone for right to buy or buy to let but just remember it aggrivates the social housing bill and condition
in other words your profit costs everyone perhaps 2 or 3 times more than social housing would cost if owned by the housing association
The tax benefits of a pension are much reduced for self employed especially if you aren't a top rate taxpayer. A SIPP is probably the best option but will take a bit of effort. Another option is a stocks and shares isa. Less tax efficient when you pay in but but better on the way out, also the returns are generally higher. Something like Fundsmith will let you pay in regular amounts and give a decent return at the moment which you can reinvest to build the pot. Obviously you could lose money this way but long term shares do well.
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After chatting with other S/E traders the consensus was steer clear of conventional schemes where you have to buy an annuity, all the guys I have talked to have had to carry on working longer due to poor performing funds, my accountant asked me why i was not paying into a scheme, I said if you find me one that will guarantee it will pay me more than I pay in I will, she said I can't. I had a PP with Equitable Life
due this year, I would have to live till i am 97 to get my fund value back, so probably going to cash it in and possibly use it to BTL
due this year, I would have to live till i am 97 to get my fund value back, so probably going to cash it in and possibly use it to BTL
