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

[booyaka]

I'm 39 with £325k in my workplace pension, which is a global equity fund with a risk level of 5 out of 7. I'm looking to retire at around 58, so I'm currently putting 50% of my salary in monthly (34% myself, 16% employer).

Would it be worth me considering moving this into a different investment? Feels like a global equity fund is probably fairly decent (between 30th Sept 2023 and 30th September 2024 the fund unit price went up by 19.5%).

Maybe worth considering some professional advice - that's a lot of money and taking "advice" on here probably isn't the wisest thing to do.

Whilst any global equity fund has a large spread of underlying investments, it's likely to be fairly US dominated at the moment. Great returns in the last year, but a spread of investments /funds potentially sounds like a good idea.

 

[booyaka]

Changing my S&S ISA, as vanguard have written to say they are about to put in place new fees for such investments, meaning anyone with less than 32K invested in the ISA will get to pay the same fees as anyone with 32K invested, £48.
Seems excessive for a small investment, clearly they want to ditch minnows, or fleece anyone who wants to stay with them.
Be interesting to see if other providers start a similar move.

Fleeced is a strong word - ultimately as a business, they obviously have made a decision based on the information they hold..... Others will follow for sure.

It's nothing personal to "smaller" investors but simply down to numbers / profit etc.

 

[ChrisD.]

I'm 39 with £325k in my workplace pension, which is a global equity fund with a risk level of 5 out of 7. I'm looking to retire at around 58, so I'm currently putting 50% of my salary in monthly (34% myself, 16% employer).

Would it be worth me considering moving this into a different investment? Feels like a global equity fund is probably fairly decent (between 30th Sept 2023 and 30th September 2024 the fund unit price went up by 19.5%).

Bloody hell, I’m at £150k and I’m 42, I thought I was doing okay.

 

[booyaka]

Bloody hell, I’m at £150k and I’m 42, I thought I was doing okay.

everyone's circumstances are different - don't sweat it. Your doing something, which is better than a lot of people in terms of retirement planning.

 

[slinxy]

I'm 39 with £325k in my workplace pension, which is a global equity fund with a risk level of 5 out of 7. I'm looking to retire at around 58, so I'm currently putting 50% of my salary in monthly (34% myself, 16% employer).

Would it be worth me considering moving this into a different investment? Feels like a global equity fund is probably fairly decent (between 30th Sept 2023 and 30th September 2024 the fund unit price went up by 19.5%).

not financial advice but how set in your way are you for retiring at 58? you can offset the risk of the market by extending your work life if required to allow the market to recover.

it's much more of a risk if you were planning to retire at 67 and leaving it all in such an asset until you retire.

 

[200sols]

Maybe worth considering some professional advice - that's a lot of money and taking "advice" on here probably isn't the wisest thing to do.

Whilst any global equity fund has a large spread of underlying investments, it's likely to be fairly US dominated at the moment. Great returns in the last year, but a spread of investments /funds potentially sounds like a good idea.

No need to pay someone over the odds for advice that will most likely see them underperform the market, especially at 39 with two decades before they want to retire.

 

[robj20]

Bloody hell, I’m at £150k and I’m 42, I thought I was doing okay.

So many factors in at about £90k 39yo. Where you live in the country, your current lifestyle and income, if you have a partner, so many things come into it.

 

[Lartyconshayo]

Bloody hell, I’m at £150k and I’m 42, I thought I was doing okay.

Comparison is the thief of joy

 

[Selekt0r]

global equity sounds fine for now, it's usually when you have about 10 years to retirement you start to make it safer.
my 2 cents is usually about 20% contribution lets you retire at 57, 50% is massive, might want to reduce it.
investing in isa / general investment account is how you get to retire before 57.
remember to use your money for fun too

Depending on what your overall portfolio and drawdown strategy will be you don't necessarily even need to reduce risk in the run-up to retirement.

The theory of de-risking in the run-up to retirement came from the days when everyone bought an annuity, and you therefore wanted to avoid a drop which would result in 'locking in' all the losses to the annuity purchase. If you are taking a drawdown approach then the important thing is to have enough of a cash buffer (e.g. using ISAs) so that you are never forced to sell your equities during a downturn period. Obviously nothing in life (or investments) is guaranteed, but most 'crashes' are max 1-2 years so if you are able to ride out that sort of period from other cash or other liquid/non-correlated assets then your equity portfolio should hopefully have recovered.

I'd agree with the 'not putting all your eggs in the pension basket' for this reason, and also for the reason that the government can (and has) changed the goalposts on pensions . My own retirement savings are heavily skewed towards DC pension, so I'm trying to rapidly build the cash/ISA buffer I need before retirement (I hit 55 early next year, and want to be in a position to retire as soon as I want to after that).

 

[tangey]

The theory of using ISAs in downturn is all well and good, but many here have ISAs in stocks and shares (for the theoretical better returns) as opposed to cash ISAs and possibly in similar funds as their pension, so those that do, using the ISA will equally involve take a hit during a crash.

 

[Selekt0r]

The theory of using ISAs in downturn is all well and good, but many here have ISAs in stocks and shares (for the theoretical better returns) as opposed to cash ISAs and possibly in similar funds as their pension, so those that do, using the ISA will equally involve take a hit during a crash.

Of course - you can't expect to keep all your ISAs full of equities as well if you want the 'safe' cash buffer to use in times of downturn

 

[tangey]

Of course - you can't expect to keep all your ISAs full of equities as well if you want the 'safe' cash buffer to use in times of downturn

Understand that, but the strategy always assumes that ISAs are cash ISAs, and for a lot who are into investing, they are not, because of the benefits they give in terms of exclusion from CGT. Also for the reason you cited about more potential goalpost moving on pensions by Gov.

A cash buffer for those might well be short term access savings, or termed accounts that are staggered every 6 months, or NSI etc.

 

[200sols]

Keeping your cash buffer in the ISA is a waste, in retirement the ISA is the best tax wrapper there is because there are no taxes on withdrawals so you really want your risk on assets in there.

 

[413x]

Bloody hell, I’m at £150k and I’m 42, I thought I was doing okay.

Haha I'm at 100 and 39 and probably behind/OK at best.

But never know. You could be sat with 300k in there after scrimping and pop it at just before taking it!

 

[413x]

My cash buffer is split between premium bonds and isa.
Next year it will all be I can isa.

90 percent of my isa is S&S and 10 percent cash. But this changes.
Next year that will jump.

Have to wait to move premium bonds in as at the isa cap with that transfer.
Next year I will not max out my isa.

 

[SaBBz]

global equity sounds fine for now, it's usually when you have about 10 years to retirement you start to make it safer.
my 2 cents is usually about 20% contribution lets you retire at 57, 50% is massive, might want to reduce it.
investing in isa / general investment account is how you get to retire before 57.
remember to use your money for fun too

Thanks. I think I do need to start pivoting to saving a bit more into ISAs but also trying to spend a little more!

Bloody hell, I’m at £150k and I’m 42, I thought I was doing okay.

You’re doing much better than the average, and I really do not enjoy my work hence the push to get a decent retirement pot sorted so that I can retire early but also have enough to keep me going.

not financial advice but how set in your way are you for retiring at 58? you can offset the risk of the market by extending your work life if required to allow the market to recover.

it's much more of a risk if you were planning to retire at 67 and leaving it all in such an asset until you retire.

Good point. I’m pretty set on it but I can definitely be flexible with my retirement age if it helps.

 

[MichaelAwkward]

Damien Talks Money on the Vanguard fees -

Honestly some of the comments on there… I really don’t blame Vanguard for not wanting thousands of tiny pots belonging to people who clearly have no idea what they’re doing.

 

[413x]

Damien Talks Money on the Vanguard fees -

Honestly some of the comments on there… I really don’t blame Vanguard for not wanting thousands of tiny pots belonging to people who clearly have no idea what they’re doing.

Stock market is same. Take a look at some of the meme stock social comments section

 

[413x]

Just read investengine are allowing transfers in

 

[MichaelAwkward]

Just read investengine are allowing transfers in

Haven’t they been on the verge of insolvency since they started? I started off an ISA with them but moved it out to Halifax shortly after. I can’t see how they’ll ever break even with their current model.