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  • FIRST POST
    • Makavelio
    • By Makavelio 12th Sep 17, 9:47 AM
    • 11Posts
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    Makavelio
    Advice on setting up my own private pension please?
    • #1
    • 12th Sep 17, 9:47 AM
    Advice on setting up my own private pension please? 12th Sep 17 at 9:47 AM
    Hello everyone,

    I want to setup my own private pension and unsure of which investments and funds to choose. Is there any easy pension for people in my situation and can you recommend any. My current employer uses nest and only matches 1% and I have a old group pension with standard life for a previous employer. The rates are not the best and I want open my own to reduce risk of loss. Thank you
Page 2
    • dunstonh
    • By dunstonh 12th Sep 17, 2:38 PM
    • 89,606 Posts
    • 56,100 Thanks
    dunstonh
    ou could consult an IFA - link in my previous post above - ring round to compare service offered/fees.
    I cant imagine that many IFAs would go further than saying that the OP should pay into NEST. Recommending a SIPP and an investment fund based on no information supplied by the OP would likely be classed as a missale.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • xylophone
    • By xylophone 12th Sep 17, 3:03 PM
    • 23,475 Posts
    • 13,652 Thanks
    xylophone
    Increasing contributions to NEST would certainly be the easiest option.

    The OP has been given the link on how to do this.

    He also has links on various other options.

    With regard to the transfer of his SL pension into NEST, he has also been given the links concerning this.

    As to whether it would be the best course in his circumstances, who can say without comparing one with the other?

    The NEST information mentions the comparison exercise and possibly using an IFA.

    If the OP is (or should become) a higher rate tax payer, he will need to check out the tax relief process.
    • Makavelio
    • By Makavelio 12th Sep 17, 5:01 PM
    • 11 Posts
    • 0 Thanks
    Makavelio
    So I should just leave my old employer group pension with Standard Life alone which has £10500 and add to NEST? The fees seem quite high with NEST compared to some SIPPS and Personal pensions. Would a SIPP with either a Van Guard Target Retirement 2050 Fund or Lifestyle fund be better option? I could transfer my Standard life to it and keep the nest for the 1% from my employer.
    • xylophone
    • By xylophone 12th Sep 17, 6:24 PM
    • 23,475 Posts
    • 13,652 Thanks
    xylophone
    Nobody on the board would be allowed to give you advice as to your best course of action.

    You need to read through all the information and links and make a decision for yourself (or with the help of an IFA).

    You did note that your /your employer's contribution to NEST are expected to increase?
    • BLB53
    • By BLB53 12th Sep 17, 6:54 PM
    • 1,156 Posts
    • 939 Thanks
    BLB53
    So I should just leave my old employer group pension with Standard Life alone which has £10500 and add to NEST?
    I am not sure whether you are permitted to transfer the SL pension over to NEST and also not sure whether you can pay in more than the 4% which will take effect from 2019 so be sure to check these points.
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • Makavelio
    • By Makavelio 13th Sep 17, 9:34 AM
    • 11 Posts
    • 0 Thanks
    Makavelio
    I am not sure whether you are permitted to transfer the SL pension over to NEST and also not sure whether you can pay in more than the 4% which will take effect from 2019 so be sure to check these points.
    Originally posted by BLB53
    How are you getting on with AJ bell as I am not sure to go with them or H&L. I am thinking of transferring my old employer group pension with £10500 into a SIPP and using the Vanguard LS 60 as it has a lot of the same holdings as my passive plus fund 3 with Standard Life. The fees on my Standard life are 1% AMC and 1.025% Fund charge so quite high. Thanks
    • xylophone
    • By xylophone 13th Sep 17, 9:39 AM
    • 23,475 Posts
    • 13,652 Thanks
    xylophone
    I am not sure whether you are permitted to transfer the SL pension over to NEST and also not sure whether you can pay in more than the 4% which will take effect from 2019 so be sure to check these points.
    See links in previous posts.
    • dunstonh
    • By dunstonh 13th Sep 17, 9:45 AM
    • 89,606 Posts
    • 56,100 Thanks
    dunstonh
    he fees on my Standard life are 1% AMC and 1.025% Fund charge so quite high. Thanks
    That does not sound right. I think you are double counting.

    I am thinking of transferring my old employer group pension with £10500 into a SIPP and using the Vanguard LS 60
    So, that is paying about 3 times more in ongoing charges than NEST.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • BLB53
    • By BLB53 13th Sep 17, 10:13 AM
    • 1,156 Posts
    • 939 Thanks
    BLB53
    How are you getting on with AJ bell as I am not sure to go with them or H&L. I am thinking of transferring my old employer group pension with £10500 into a SIPP and using the Vanguard LS 60 as it has a lot of the same holdings as my passive plus fund 3 with Standard Life. The fees on my Standard life are 1% AMC and 1.025% Fund charge so quite high. Thanks
    I have been with AJ Bell sipp for 10 years now and have generally had no problems so can recommend. They did change their charges in 2016 but it worked out OK for me as I had moved to drawdown and I just pay £25 p.a. for a one-off payment.

    The ongoing platform charges would be 0.25% and then the Vanguard fund charges so it should be less than half the charges you are paying with SL and no more expensive than the ~0.5% nest charges. (I am not sure where the 3x more comes from??)
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • dunstonh
    • By dunstonh 13th Sep 17, 10:25 AM
    • 89,606 Posts
    • 56,100 Thanks
    dunstonh
    (I am not sure where the 3x more comes from??)
    Nest is 0.3%

    OP was saying that he was considering HL. HL is 0.45% for platform charge and the fund charge is 0.24% which is 0.69%. So, its not quite three times but just over double.

    SIPPs are also higher maintenance. Remember the first thing the OP said was he wanted something easy. NEST is by far the easiest option as it is already open. It requires no maintenance and has low ongoing charges.

    Back to the OP, have you confirmed that the SL charges are 1%? An awful lot of SL plans, especially ex group ones have discounts on the default charge. If you are just going by their factsheet, that may not be the actual charge you are paying. Factsheets show the base charge before discounting.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • BLB53
    • By BLB53 13th Sep 17, 11:07 AM
    • 1,156 Posts
    • 939 Thanks
    BLB53
    Nest is 0.3%
    Does that include the underlying fund charges? Also you do need to include the 1.8% fee deducted from each contribution?
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • Makavelio
    • By Makavelio 13th Sep 17, 11:23 AM
    • 11 Posts
    • 0 Thanks
    Makavelio
    I have been with AJ Bell sipp for 10 years now and have generally had no problems so can recommend. They did change their charges in 2016 but it worked out OK for me as I had moved to drawdown and I just pay £25 p.a. for a one-off payment.

    The ongoing platform charges would be 0.25% and then the Vanguard fund charges so it should be less than half the charges you are paying with SL and no more expensive than the ~0.5% nest charges. (I am not sure where the 3x more comes from??)
    Originally posted by BLB53
    Is drawback when you use the money in the pot as and when you need it?

    During my research I was thinking about just leaving it all in Vanguard LS 60, as that seems quite easy for the time being.

    I did phone up Standard Life and they did say I could transfer from a group pension into a personal pension but when i received the paper work it shown group pension with a higher rate. I then decided to cancel because it was still a group pension.
    • BLB53
    • By BLB53 13th Sep 17, 11:33 AM
    • 1,156 Posts
    • 939 Thanks
    BLB53
    Is drawback when you use the money in the pot as and when you need it?
    Drawdown is when you decide to take benefits from your pension and is a common alternative to taking an annuity.

    I use flexi-drawdown which means I use my pension pot like a savings account and just take one-off withdrawals as and when required - currently once per year. The investments remain in Vanguard Lifestrategy 60 and have grown by an average of 10% each year over the past 6 years.
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • dunstonh
    • By dunstonh 13th Sep 17, 12:03 PM
    • 89,606 Posts
    • 56,100 Thanks
    dunstonh
    Does that include the underlying fund charges? Also you do need to include the 1.8% fee deducted from each contribution?
    Originally posted by BLB53
    0.3% is fund/product combined.

    There is a 1.8% initial fee but that is quickly recouped by the lower ongoing charge.

    I did phone up Standard Life and they did say I could transfer from a group pension into a personal pension but when i received the paper work it shown group pension with a higher rate. I then decided to cancel because it was still a group pension.
    Your charges are not allowed to increase when you cease to be employed by the employer linked to the group scheme. SL can convert your group scheme to an individual one (not that it really makes any difference). However, if you phone their sales centre, they may try and transfer you to one of their other schemes. The charges on those could be lower or higher.

    The investments remain in Vanguard Lifestrategy 60 and have grown by an average of 10% each year over the past 6 years.
    Which is a period of sustained growth and no real volatility. So, you would expect the long term average to be much lower than that.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • BLB53
    • By BLB53 13th Sep 17, 5:03 PM
    • 1,156 Posts
    • 939 Thanks
    BLB53
    There is a 1.8% initial fee but that is quickly recouped by the lower ongoing charge.
    If this 1.8% is deducted from each monthly contribution, it cannot be 'quickly recouped' and therefore adds to the overall cost of NEST.
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
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