Pensions for agency social workers

I know that I moaned when I was employed about how much I felt I was loosing each month to my pension. Little did I know that when I became an agency social worker it would involve a lot more research.

Please note that by no means am I an expert with pensions but this is the information I have learnt. My recommendation would be that you speak to an advisor to discuss your best options if this is something you want to set up.

Why should an agency social worker consider taking out a pension?

There is a large number of self-employed social workers and this is continuing to rise. Many of these I know have not even considered a pension and their long-term plan. Or, they have just pushed it to one side as we always seem have other things on our mind that take all of our time.

I have been an agency social worker for a number of years now and have finally thought that I can’t just ignore it and I need to get it sorted. After all, we don’t want to be relying on the state pension. I get frustrated thinking about the increased age of retirement so who knows what it will actually be when it’s my turn.

It is well known that the younger you are when you sign up to your pension the better it is. With regards to having a state pensions it is really clear in all of the statistics available online that if you pay in roughly £100 at 30 years old you come out with around £70,000 opposed to joining at 50 and only receiving around £25,000.

Eventually, when I retire I already know what sort of lifestyle I hope to have and the many other things that I want to do. I don’t want to be worrying about it. I want to be enjoying it.


What are the different types of self-employed pensions;

This is simple, there are two types of pensions available if you are self employed;

  1. A self invested personal pension (SIPPs)
  2. A stakeholder pension plan

So lets break these down;

  1. A self invested personal pension plan for social workers

    This is the most common pension plan for self-employed workers. There is an opportunity here to gain a higher return and it provides more options than a stakeholder pension. You are able to choose where your pension is invested and there are more providers available. You are able to determine the risks that you are willing to take.
    It is always very important to look into the fine detail as sometimes there are higher fees that you may need to be aware of with personal pension plans.

  2. A stakeholder pension for self-employed social workers

    This is an easier option if your income is inconsistent and the charges are lower. There is an option to pay a minimum of approximately £20 each month and there is no charge if you want to adapt your payments or stop them.
    A stakeholder pension will have a default investment strategy. This is helpful for people who don’t want to do the research and decide where they want to invest their pension. A stakeholder pension normally involves low to medium risk investments which means that the returns may be lower.

Tax relief on self-employed pensions

As we are self-employed we know that we wouldn’t have the local authority or trust we are working for putting any money into our pension. However, please note that you do get tax relief on the money that you put into your pension.

e.g. if you are a basic-rate tax payer and put £100 into your pension HMRC will contribute £25.


How much money would I need to pay into my private pension?

This is completely dependent on how much money you want to have when you retire. You need to think realistically about this and should estimate roughly what your living costs would be. By then you wouldn’t be paying your mortgage, commuting costs to and from work and so on.

I have read that they estimate that you should ideally put aside 15% of your gross income for your pension. It often says you should pay in as much as you reasonably can. There are many different pension calculator tools that are available online and you can see the differences if you change the figures around to give you more of an idea.


Are there any other costs with personal pensions?

The amount that you pay for a personal pension will vary between each of the providers. You will need to do research into this to make sure that you are going with the best option for you.

You need to consider;

  • How often you are planning on changing it
  • How much they are worth?

After you have an idea on this you can start to look into the different providers available and the best option for you.

There are some costs with setting up a personal pension and these can include;

  1. The set up fee- for some personal pensions that can be up to £500
  2. Cancellation fee/ transfer fee – this is normally under £75
  3. A charge for every time you buy or sell an investment this is around £15
  4. Some companies also charge for an annual management fee where others do not do this. I have read that this can be up to £1000.

How do I set up my self -employed pension plan?

Have a look online and do some of your own research. I would always recommend speaking to an advisor about this. If you would like me to get someone to contact you just let me know.

If you have any questions around the following just follow my links;

  1. Life Insurance for social workers
  2. Income Protection for agency social workers
  3. Professional indemnity and public liability for agency social workers 
  4. Getting a mortgage as an agency/ permanent social worker 
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