The question, from Arthur, 32 from London
I work freelance and don't currently have a pension set up - so am looking to get something started. What's the best type of pension for me? What are my options?.
The answer, from Marlene Outrim CFP™ Chartered FCSI, Founder, Uniq Family Wealth - an Accredited Financial Planning FirmTM
As you are freelance, and I am assuming you are a sole trader, I imagine that your earnings will vary from year to year, so you need something flexible, so you can stop and start contributions if you need to. Most Stakeholder plans offer this, but is you want to pay regular contributions it could be a bit of a hassle informing the company every time you want to change the amounts. Best to either start off with a small monthly amount which you do not think will change and then add to it at the end of each financial year when you can see how much cash you have available, of just see what you have at the end of each year that you can put into a plan. Your contributions will be paid net of basic rate tax of 20% and if you turn out to pay higher rate tax you can claim back a further 20% via your Self-Assessment return on that amount. You cannot contribute more than £40,000 in one year, but you can carry forward unused allowances from the last 3 years. If you operating as a Private Limited Company, then you as an Employer have the ability to contribute which would offset some Corporation tax and as an employee you could still make contributions too. In this case make sure you take advice.
Details of a financial planner close to you are available on cisi.org/wayfinder
Marlene Outrim CFP™ Chartered FCSI, Founder, Uniq Family Wealth