Pension

Hi I'm on esa and pip. Probably shortly move to uc. I work part time. 10-15 hours a week
I'm worried about the future. I have no pension. Can I set up a private one or will I get in trouble?

As someone who contributed to a private pension whilst they were on ESA, you have nothing to worry about.

Just contact ESA and ask them. A decision maker will contact you and will likely be fine with it.

Pensions are not wealth, there's no issue really as long as you're using your income not your capital to contribute to it.

It's well worth doing as you'll get tax relief, although currently it's not the best time to be honest given how volatile the markets are. You could however put the funds in bonds or cash and the risk will be a lot lower. You'll also be able to contribute more than someone who isn't working too

If you choose a SIPP pension there are cash funds you can invest in that give a much better return than you can get in a cash ISA or normal building society/bank savings account. That way you get the tax relief but don't get any risk.

In the short term, keeping your pension in cash is okay but long term it's probably a bad idea as the rate is set below inflation. Plus you will still be paying fees.

I mean these fees can be low for robo investment platforms (Nutmeg, Moneyfarm etc) or low fee funds like Vanguard Lifestrategy but you still have to pay them which you obviously wouldn't with an ISA.

I must stress that don't treat any of this as financial advice. It's just useful to know. Obviously make sure whoever you go with is regulated by the FCA.

Sadly though for those on benefits, an ISA isn't much good if it takes you over the savings threshold. This includes the Lifetime ISA with its 25% bonus which if you ask me was created by George Osborne to push people off benefits as the 25% bonus is counted as capital. You can however use it toward the purchase of your first home.