Pension fund performance - do you monitor yours, how is it doing, do you actively change it?

[NotAGolf]

I transfer as much as I can from my workplace pension once a year to my Vanguard SIPP where it’s invested into the same index funds as my S&S ISA and Lifetime ISA. Some workplace pensions aren’t too bad on fees but some are awful so ymmv.

Thanks for this. I didn't know this was an option.

My current provider is The People's Pension. As others have mentioned, their fees are quite high and the fund options are limited. It looks as though they don't allow transfers out either, although I've emailed them to confirm this.

I've merged all of my older jobs into my last employers one (Legal and General), but I didn't consider transferring out of that into my own SIPP. Fees aren't too bad with L&G (0.35% annual management charge +0.13% for the fund), but there are cheaper options around. This has definitely prompted me to look around.

I'm 37 with a pretty measly pot. I've always contributed, but was low paid up until the last 5 years or so, and none of my employers have ever paid above the bear minimum.

My happy to go very high risk as retirement is a fair way off.

I also save into a S+S Isa and have built up a decent chunk in that. This is primarily a buffer for emergencies, but if I don't dip into it, will hopefully allow me to retire earlier by living live off it for a few years before having to break into my pension.

 

[Jim99]

Thanks for this. I didn't know this was an option.

My current provider is The People's Pension. As others have mentioned, their fees are quite high and the fund options are limited. It looks as though they don't allow transfers out either, although I've emailed them to confirm this.

I've merged all of my older jobs into my last employers one (Legal and General), but I didn't consider transferring out of that into my own SIPP. Fees aren't too bad with L&G (0.35% annual management charge +0.13% for the fund), but there are cheaper options around. This has definitely prompted me to look around.

I'm 37 with a pretty measly pot. I've always contributed, but was low paid up until the last 5 years or so, and none of my employers have ever paid above the bear minimum.

My happy to go very high risk as retirement is a fair way off.

I also save into a S+S Isa and have built up a decent chunk in that. This is primarily a buffer for emergencies, but if I don't dip into it, will hopefully allow me to retire earlier by living live off it for a few years before having to break into my pension.

They offer total transfers out, I got rid of my TPP ASAP when I quit that job. Potentially you can't transfer out whilst still paying in, though.

 

[Mercenary Keyboard Warrior]

Yeah in regards transfers I don't think they are allowed to refuse a transfer* if the scheme is inactive, ie not currently being paid into.
Many will refuse a current scheme being partially transferred out as why would they allow it simply.

* Apart from things like DB to DC where you need to prove advice has been taken.

 

[Uther]

Thanks for this. I didn't know this was an option.

My current provider is The People's Pension. As others have mentioned, their fees are quite high and the fund options are limited. It looks as though they don't allow transfers out either, although I've emailed them to confirm this.

I've merged all of my older jobs into my last employers one (Legal and General), but I didn't consider transferring out of that into my own SIPP. Fees aren't too bad with L&G (0.35% annual management charge +0.13% for the fund), but there are cheaper options around. This has definitely prompted me to look around.

I'm 37 with a pretty measly pot. I've always contributed, but was low paid up until the last 5 years or so, and none of my employers have ever paid above the bear minimum.

My happy to go very high risk as retirement is a fair way off.

I also save into a S+S Isa and have built up a decent chunk in that. This is primarily a buffer for emergencies, but if I don't dip into it, will hopefully allow me to retire earlier by living live off it for a few years before having to break into my pension.

You can transfer out of the PP, my son did it last year when he left his last job. It's much better in your own SIPP imo.

 

[Azza]

Thanks for this. I didn't know this was an option.

My current provider is The People's Pension. As others have mentioned, their fees are quite high and the fund options are limited. It looks as though they don't allow transfers out either, although I've emailed them to confirm this.

I've merged all of my older jobs into my last employers one (Legal and General), but I didn't consider transferring out of that into my own SIPP. Fees aren't too bad with L&G (0.35% annual management charge +0.13% for the fund), but there are cheaper options around. This has definitely prompted me to look around.

I'm 37 with a pretty measly pot. I've always contributed, but was low paid up until the last 5 years or so, and none of my employers have ever paid above the bear minimum.

My happy to go very high risk as retirement is a fair way off.

I also save into a S+S Isa and have built up a decent chunk in that. This is primarily a buffer for emergencies, but if I don't dip into it, will hopefully allow me to retire earlier by living live off it for a few years before having to break into my pension.

Never heard of 'The People's Pension'.

On their 'Global Investments (up to 100% Shares) Fund' they charge 0.5% plus a transaction fee of 0.06%! This funds benchmark is UK Consumer Price Index + 3% p.a.


Impressive they can get away with that.

 

[Narj]

I've been looking into this a lot lately and am seriously looking at moving some of my investments away from my IFA. Performance has been pretty rubbish compared to the stuff I manage myself in Vanguard and also my work pension which is not even 100% equity.

Given platform fees, ongoing management fees etc, managed funds just aren't worth it - I'd have been far better off just putting all the money in a global index tracker or combination of index trackers - which is exactly what I did with my "self-managed" portion on Vanguard (basically overspill because I don't want BS fees just to feed in extra money on top of the DD).

I think it's fine to take an interest and check that things are working, but obsessing over it and checking too often is not good for you!

 

[NotAGolf]

They offer total transfers out, I got rid of my TPP ASAP when I quit that job. Potentially you can't transfer out whilst still paying in, though.

That's the problem, I'm still paying in (and would like to continue to do so to get my employer contributions).

 

[Narj]

That's the problem, I'm still paying in (and would like to continue to do so to get my employer contributions).

Don't the rules change next tax year so partial transfers have to be allowed?

Or am I imagining that?

 

[booyaka]

I've been looking into this a lot lately and am seriously looking at moving some of my investments away from my IFA. Performance has been pretty rubbish compared to the stuff I manage myself in Vanguard and also my work pension which is not even 100% equity.

Given platform fees, ongoing management fees etc, managed funds just aren't worth it - I'd have been far better off just putting all the money in a global index tracker or combination of index trackers - which is exactly what I did with my "self-managed" portion on Vanguard (basically overspill because I don't want BS fees just to feed in extra money on top of the DD).

I think it's fine to take an interest and check that things are working, but obsessing over it and checking too often is not good for you!

Using the services of an IFA isn't about getting great performance.

It's about advice, planning, staying on track, peace of mind, removing the hassle from managing multiple savings/investments, etc etc.

By all means discuss your concerns with your IFA, but the IFA's job is not to just focus on performance.

 

[200sols]

Using the services of an IFA isn't about getting great performance.

It's about advice, planning, staying on track, peace of mind, removing the hassle from managing multiple savings/investments, etc etc.

By all means discuss your concerns with your IFA, but the IFA's job is not to just focus on performance.

Are you an IFA?

 

[Narj]

Using the services of an IFA isn't about getting great performance.

It's about advice, planning, staying on track, peace of mind, removing the hassle from managing multiple savings/investments, etc etc.

By all means discuss your concerns with your IFA, but the IFA's job is not to just focus on performance.

Yeah I agree that at first there was a lot of value in sorting out plans, tax efficiencies, other financial affairs etc but I don’t feel like it’s a value proposition anymore and is actually more of a hindrance (eg: wanting to go through expensive advice process just to recommend the same thing and increase direct debits - ridiculous.)

Basically I’m far more financially level-headed and confident than when I first got advice and am not likely to panic at a bit of volatility. I can just use index funds and re-balance once a year if necessary and save myself a load in fees.

I don’t have complex financial affairs. Seems like a no-brainer to me.

 

[Biz.Kid09]

I am just about to leave my first job. I was enrolled in the workplace pension with L&G automatically and I have been making my own contributions also.

I suspect I will hear from them soon with regards to my options post me leaving the company, I guess my pot will be transferred to some sort of personal plan.

Can anyone point me in the direction of some good resources to start looking at the market and see if I am best off transferring it all out, no immediate plans to go to a new company so suspect I will be managing this myself for a few months at least before I am at a new company and will enroll with them and then I can make a decision then with regards to merging etc

 

[Sirrel Squirrel]

I am just about to leave my first job. I was enrolled in the workplace pension with L&G automatically and I have been making my own contributions also.

I suspect I will hear from them soon with regards to my options post me leaving the company, I guess my pot will be transferred to some sort of personal plan.

Can anyone point me in the direction of some good resources to start looking at the market and see if I am best off transferring it all out, no immediate plans to go to a new company so suspect I will be managing this myself for a few months at least before I am at a new company and will enroll with them and then I can make a decision then with regards to merging etc

You can just leave it as is if you want to

 

[EvilRob]

Not sure what those trustnet charts show - are they nominal or real?

Id be happy with 7% pa. With my contributions that gets me to a million quid pot over 25 years.

7% should be achievable, but a million quid pot sounds unlikely to me (I just find it unlikely that I would ever have this much money) If I live for 30 retirement years that will give me £33k a year which should be enough.

Scanned through the thread, but my take:

• Assume ~3% growth pessimistic, ~6% growth optimistic (in today's money)
• Stop messing about with bonds and go full equities, at least until within a few years of retirement. Potentially well into if you're doing drawdown. There are well thought out strategies for managing equity volatility risk during drawdown.
• Stop over analysing all the funds. Don't assume past performance is predictor of future growth. In some cases it's even the opposite - funds that have grown a lot in past few years might be overvalued and you're buying in at the peak.
• Do NOT try and time market to buy in even if it seems over valued. This very rarely works out in your favour.
• Go with the cheapest passive global tracker you can find.
• Assume 4-5% safe withdrawal rate per year in today's money post retirement (not just fund value at retirement/expected # years retired)

Overall, it seems like you're investing a huge amount of time in this but not really learning much that's going to help you formulate a solid strategy. I often say this, but I'd start with James Shack's YT channel.

 

[katy81]

I'm in my early 40s. Probably paid in to like 4 or 5 company pensions. No idea how to sort it.

I'll just work till I drop I expect.

 

[Orangeade]

I'm in my early 40s. Probably paid in to like 4 or 5 company pensions. No idea how to sort it.

I'll just work till I drop I expect.

You have worked hard for your money so it's worth the effort. It you're in your early 40s you still have several decades of work ahead of you. This is huge amounts of money. Definitely worth a little investment of time and effort!

 

[booyaka]

Yeah I agree that at first there was a lot of value in sorting out plans, tax efficiencies, other financial affairs etc but I don’t feel like it’s a value proposition anymore and is actually more of a hindrance (eg: wanting to go through expensive advice process just to recommend the same thing and increase direct debits - ridiculous.)

Basically I’m far more financially level-headed and confident than when I first got advice and am not likely to panic at a bit of volatility. I can just use index funds and re-balance once a year if necessary and save myself a load in fees.

I don’t have complex financial affairs. Seems like a no-brainer to me.

Totally - if you have no need for the service - then politely request to end it. You can always return if you require further advice in the future.

 

[slinxy]

• Go with the cheapest passive global tracker you can find.

Depending on the fund and broker, it's normally cheaper to split it into two.
Brokers then to change less for developed market and more for emerging markets as their stocks are less liquid. The fee for a global tracker tends to be the same fee for the emerging market.

So if you invest £100,000 100% in the a global tracker, it would be at say 0.2% = £200
if you split it into two, say 90% for developed at 0.1%, = £90 plus 10% for the emerging at 0.2% = £20. That's only £110 fees compared to the £200.

BUT it's important that you try and by both from the same company as different companies classify different countries as developed or emerging.. like South Korea and you could be missing a company like samsung.

EDIT: for maths error

 

[ci_newman]

Depending on the fund and broker, it's normally cheaper to split it into two.
Brokers then to change less for developed market and more for emerging markets as their stocks are less liquid. The fee for a global tracker tends to be the same fee for the emerging market.

So if you invest £100,000 100% in the a global tracker, it would be at say 0.2 = £20,000
if you split it into two, say 90% for developed at 0.1, = £9000 plus 10% for the emerging at 0.2 = 2,000. That's only £11,000 fees compared to the £20,000.

BUT it's important that you try and by both from the same company as different companies classify different countries as developed or emerging.. like South Korea and you could be missing a company like samsung.

0.2% of £100000 is not £20000 though, it is £200.

So in your example it's a difference of £200 vs £110.

Unless I have somehow vastly misunderstood your post, but you're listing fees of 20% and 10%, not 0.2% and 0.1% (e.g. Vanguard Global All Cap is fees of 0.23%).

 

[slinxy]

0.2% of £100000 is not £20000 though, it is £200.

So in your example it's a difference of £200 vs £110.

Unless I have somehow vastly misunderstood your post, but you're listing fees of 20% and 10%, not 0.2% and 0.1% (e.g. Vanguard Global All Cap is fees of 0.23%).

Yes sorry, I had very little sleep last night... I will edit it to correct it.