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I want to start a new pension - Which provider would you recommend?

Sam | Norfolk| 30/05/2019 | 0

  • Private Pension
  • Funds

Sam's question in full

I'm a 48 year old with minimal pensions. I would like to start a new pension to save for the next 12 years. I've already set up a Stocks & Shares ISA with Nutmeg, so would like to start my pension with another provider. I know little about investments so would like to use a company that has ready made funds based on risk assessment. Which would you recommend?

Holly Mackay's Response

My first question is why you want to look to set up a pension elsewhere.

There are benefits in having your ISA and pension managed in the same place.

Ring Fencing

Nutmeg and most other investment providers will ring fence client money from their account.

So if anything goes wrong, your money is held by what we call a custodian. They are also covered by the Financial Services Compensation Scheme (FSCS), which covers you for up to £85,000 we hold with any one provider, if they get into troubles. So do have a look at that. 

If you still want to look elsewhere, not so many of the robo advisers have pensions. You could, if you're worried about security, look to stick with a household name such as Aviva, who will let you buy a DIY pension online from them.

Robo advisers

Other options would be to use more of what we call an investment supermarket. Hargreaves Lansdown is the country's biggest. It's a FTSE 100 firm, if you're worried about security. So that might be a good place to look. They can be expensive for much larger accounts, but if you're getting started with the pension and their service is good, then the fees won't be relatively out of line with with the market.

Ready meals

Other places you could look to start a DIY pension, would be AJ Bell Youinvest. Unlike with Nutmeg and Aviva, both of whom offer ready-made pension investment packages, with Hargreaves and AJ Bell Youinvest you will have to pick the investments you actually put into your pension.

If you want the investment equivalent of a ready meal, then have a look at what we call multi asset funds to put inside your pension. Vanguard's Lifestrategy range or BlackRock's Consensus range are two such options. 

Result:

On balance, if you've got a relatively small amount in your ISAs and are starting off with a pension, I think it sounds like it may make sense just to stick with the provider you're with and the service that you know.

Hope this helps,

Holly

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

Our Expert

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Holly Mackay

Founder and MD of Boring Money, Holly Mackay has been working in the investments space since 1998. She read Modern Languages at Oxford, with a special focus on Mediaeval French which was deeply interesting and arguably utterly useless.

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