Investment platform, Interactive Investor, is set to launch a new pension product in the coming weeks that aims to offer great value for savers with small balances. The new pension, called Pension Essentials, will be a self-invested personal pension (Sipp) that allows customers to save up to £50,000 for a monthly fee of £5.99.
In the past, Interactive Investor charged all customers with a Sipp a flat fee of £12.99 per month, regardless of the amount invested. While this fee was competitive for those with large balances, it was more expensive for those with smaller amounts. The introduction of Pension Essentials aims to address this issue and attract savers who are not already saving for retirement through workplace schemes.
According to official figures from the Office for National Statistics, almost one-third of people do not expect to have any retirement savings beyond the state pension. This is especially true for self-employed workers who do not benefit from auto-enrolment. A recent survey by Interactive Investor found that as many as three-quarters of self-employed workers are not paying into a pension.
While it is never too late to start saving for retirement, even small monthly contributions can make a significant difference to a person’s lifestyle in retirement. Interactive Investor’s new product is just one of many offerings from pension providers seeking to capture this market with competitive fees and easy-to-manage products.
When it comes to starting a pension, it is important to consider whether to fund a workplace pension or a personal pension. Workplace pensions often come with the benefit of contributions from the employer, which is essentially free money. However, if you do not have an employer, you can set up your own pension and still benefit from tax breaks.
Pension tax relief is available until the age of 75, so it is never too late to start saving. Even if you are close to retirement age, opening a pension can still make a difference to your retirement income. For example, saving £200 a month from the age of 55 can result in an annual income of about £2,000 by the time you reach state retirement age at 67.
To get started with a pension, it is important to take action rather than waiting for the perfect choice. There are now many low-cost pension options available, and the sooner you start, the sooner you can benefit from tax relief and compound interest.
When looking for a pension provider, consider whether you want to manage your investments yourself or have someone do it for you, what type of investments you want to hold, if you have existing pensions to consolidate, and if you want to contribute regularly or invest a lump sum. Self-employed individuals should also look for pensions that allow flexible contributions due to variable income.
Pension fees vary between providers, so it is important to compare costs. Check platform fees, dealing charges, fund costs, exit fees, and drawdown fees before making a decision. Personal pensions can also be useful for consolidating existing retirement pots and saving additional funds outside of workplace pensions.
Interactive Investor’s Pension Essentials product offers competitive fees compared to other Sipp offerings in the market. There are no additional fees for regular investing, and trading fees are low. If customers exceed the £50,000 threshold, they will… [content cut off].
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
