Pension advice

[superpp]

Hi everyone,

My daughter (21 years old) qualified as a teacher in the summer, but didn't secure a regular job straight away.
Therefore she is doing supply work, probably until the next school year.
She is basically a contractor and therefore not in a pension scheme.

Is it worth her doing a personal pension until next summer, if so could this be stepped down to a small payment once she is in a workplace pension?
If so where do we start, recommendations please.

Thanks in advance.

[UpTheIron]

You say she is a "contractor", how is she actually employed?

Through her own Ltd Company, sole trader, or PAYE from the school/LEA/agency?

In all scenarios it's easy enough to start a SIPP and contribute (the most efficient manner will depend on how she is engaged).

If she is PAYE then her employer will be obliged to enroll her I to their pension scheme AFAIK.

[brman]

Regardless, I would suggest that starting any pension now (eg a basic sipp) is better than worrying about whether it is the right one long term. I am not suggesting don't bother doing your research, just don't let it delay things too much.

By which I mean don't let analysis paralysis kick in. A lesson I learnt about 30 years too late......

[UpTheIron]

Agreed... otherwise it's (most of) a year lost, and then next summer she decides she likes the flexibility and variety (and higher day rate) so puts it off again. One year turns into ten and she's never going to catch up.

A cheap SIPP, Vanguard tracker funds and when her situation changes she can carry on or stop contributions as she sees fit.

[superpp]

thanks all for info so far.
when I say Contractor, she works for an agency who offer her day jobs at which ever school needs a teacher that day.
the agency pays her weekly.

I've always been in my companies final salary scheme, so I have no idea how a private pension works in relation to tax.
Would any tax benefits be automatically resolved via a SIPP through Vanguard for example?

[brman]

superpp said:

Would any tax benefits be automatically resolved via a SIPP through Vanguard for example?

generally, I think yes (but I guess it is always worth checking). She pays in what she wants, the SIPP provider then gets 25% extra back from HMRC for you. There are limits to how much can be paid in a year but I would be surpised if a 21 year old wanted to get close to those! (100% of salary or £40k gross)

[superpp]

thanks I think I should have enough info now.
I'll get her to set one up later, just didn't want her missing 12 months pension contributions.

[Mr Pointy]

superpp said:

thanks I think I should have enough info now.
I'll get her to set one up later, just didn't want her missing 12 months pension contributions.

Opening a Vanguard SIPP should be straightforward, although she will need to select which funds to contribute to which can be a bit confusing at first:
https://www.vanguardinvestor.co.uk/what-we-offer/p...

The Lifestrategy funds are a collection of pre-defined funds with increasing levels of exposure to the stock markets:
https://www.vanguardinvestor.co.uk/investing-expla...

The key is to start contributing as soon as she can.

[superpp]

Mr Pointy said:

The key is to start contributing as soon as she can.

This is the reason for me asking, she has many years of compounding investing ahead of her.