In general, we’d suggest using an adviser in a few key circumstances: if you don’t know much about money and don’t want to find out, it can be worth accepting your fate and signing up an adviser. Ditto if your affairs are very complex – second homes, foreign income, income from trusts, a step-family, you might need advice from a professional. Advisers can also be useful to impose financial discipline, making you save. You need to be willing to trust someone else with your money, of course, but for plenty of people the right financial adviser will be worth the cost.
However, for the time being your finances are reasonably straightforward and you can probably do most of the things you need to do by signing up for a platform. In this, I’ll issue a challenge. I bet you can get set up on a platform in less than fifteen minutes, probably while you’re watching Games of Thrones at the same time (they all die anyway). I know that when you’ve got small children and teenagers pottering around, fifteen minutes can seem extremely precious, but if you’ve spent more than fifteen minutes thinking about how you should be doing it, then it’s probably worth giving it a go just to clear it from your mental baggage.
Pension provision is a massive challenge for the self-employed. The former pensions minister Steve Webb, who is now working for Royal London Asset Management, said pensions savings among the 4.4m UK self-employed was at ‘crisis level’. He pointed to Government stats, which suggest that, while 62% were members of a pension scheme in the 1990s, it is now around a quarter. So you are not alone, plus you’ve only been self-employed for about five minutes, so it’s hardly surprising you haven’t got round to it yet.
One wrinkle worth knowing is that if your accounting affairs aren’t structured correctly to ensure you’re paying all the relevant NI contributions, you might not even be entitled to the state pension – for which you now need a hefty 30 years-worth of contributions. Notwithstanding your chunky contributions into your former employer’s scheme (clever move!), I’d suggest your first priority should be check that everything is tickety-boo on that front.
From there, it should be relatively easy to set up a direct debit into a Self-invested personal pension (SIPP). Sounds complicated. It really isn’t – all the complicated stuff (tax reliefs etc) is mostly done for you by the platform. You will have to pick what investment you put it in – but most platforms have default choices or recommended fund lists. Multi-asset income or UK equity income might be reasonable choices to start off with.
If the platform stuff feels a bit too complicated, just using one of the investment trust ISAs will get you started. Saving is saving after all – pensions are one option, but there are others: Aberdeen, Witan, Baillie Gifford all have good, cheap schemes, with low minimum investments levels. The key is not to get bogged down in the complexity of it all: A nice, plain vanilla UK investment trust (or a FTSE All Share tracker) is a decent enough place to start.
It is becoming something of a BM motto, but just remember that doing something is usually better than doing nothing and before you know it, money won’t be on your mind anymore and you can spend your time doing something far less boring.