We take a closer look at Nutmeg’s pension options.
Nutmeg has become one of the main players in the fast-growing digital investment industry since it was founded in 2011. Billed as an online investment management company, it offers ISAs, Lifetime ISAs, Pensions and general investing products. It differs from other financial management firms by offering a low-cost, high-quality investment platform.
Read on to find out about Nutmeg’s pension offerings.
What is Nutmeg?
In a relatively new industry, Nutmeg are the first digital wealth manager, with a five year performance track record.
Nutmeg is a discretionary service, meaning it manages all investment decisions so you don’t have to.
You can easily set up a new pension with Nutmeg in a few minutes, or have the option of transferring your existing old pensions.
How does Nutmeg work?
Nutmeg was set up with the aim of providing complete transparency on your investments. The founders were frustrated at the exclusivity and lack of transparency in the investment world.
With Nutmeg, you are able to view your investments 24/7, as well as top up, transfer or withdraw whenever you like.
All Nutmeg pensions are placed in diversified portfolios, which means your money is invested across many assets (equities, bonds and cash), industries and countries. If any of your portfolio pays out dividends, Nutmeg will reinvest them automatically.
How do I apply for a Nutmeg pension?
First, you must fulfil their general criteria of having a UK bank account, be over 18 and be a resident of one of Nutmeg’s accepted countries.
Customers have the option to open a new pension with Nutmeg or consolidate all their existing old pensions into one easy fund, but you must have a minimum investment of £5,000.
When setting up your pension, you’ll be asked about your goals and risk preference. Different risk levels come with different allocations of assets in your portfolio. This can always be modified if your goals or circumstances change.
All pension providers charge an annual fee, but its sometimes difficult to find out how much you’re paying. However, Nutmeg aim to be transparent by charging one simple annual fee.
0.75% on pensions up to £100,000.
0.35% on pensions over £100,000.
Pros and Cons
- View your pension fund 24/7 online or via the app.
- No set-up or exit fees.
- No hidden fees.
- Automatically adds the Government’s 25% contribution to anything you put in, which is capped at £40,000.
- Flexible access: You can take money out of your fund from the age of 55 or over if you wish.
- Minimum pension investment: You must have at least £5,000 minimum to invest in a Nutmeg pension.
- Less control: You give Nutmeg permission to choose the investments on your behalf. If you want more control over where it’s invested, it’s worth looking elsewhere.
Is Nutmeg safe?
Nutmeg has been trading successfully and securely for over seven years and has over 60,000 customers in the UK. It is regulated by the Financial Conduct Authority (FCA), which means you may be entitled to compensation if it cannot meet its financial obligations.
Nutmeg has appointed State Street at a ‘custodian bank’ to protect your investments in a segregated account in the unlikely event of either firms becoming bankrupt.