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  • FIRST POST
    • JDoon
    • By JDoon 28th Nov 17, 12:23 PM
    • 3Posts
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    JDoon
    ISA and SIPP Options
    • #1
    • 28th Nov 17, 12:23 PM
    ISA and SIPP Options 28th Nov 17 at 12:23 PM
    Over the years Iíve ended up with several private pensions and looking at the charges and performance of these they all seem to be sitting around the 1% charge and not performing too well.

    Iím therefore considering bringing them altogether (approx. £80k) under a single SIPP and had been considering the Vanguard Target Retirement Fund 2030.

    Iíve also got £10k that Iím looking to put into a S & S ISA , my first thought was to go for Vanguard Lifestrategy 60 but Iím now wondering if Iíd be better to look at an alternative for the ISA. This is based on comparing the two funds and the allocation in both which is pretty similar.

    Iím thinking possibly to go for either HSBC Global Strategy Balanced or the L & G Multi Index Fund 5.

    New to investing and Iím wondering if this is a better approach versus going for the Vanguard Targeted Retirement for the SIPP and Lifestrategy for the ISA?

    Grateful for any views on whether this is good approach or possible alternatives.

    Thanks
Page 1
    • dunstonh
    • By dunstonh 28th Nov 17, 12:33 PM
    • 89,873 Posts
    • 56,541 Thanks
    dunstonh
    • #2
    • 28th Nov 17, 12:33 PM
    • #2
    • 28th Nov 17, 12:33 PM
    my first thought was to go for Vanguard Lifestrategy 60 but I’m now wondering if I’d be better to look at an alternative for the ISA.
    The VLS60 is no longer the best option if you are after active passives.

    had been considering the Vanguard Target Retirement Fund 2030.
    That is very much a niche fund that is unsuitable for most people. It forces risk reduction at their pace and uses a level of reduction that is greater than what the typical consumer is likely to move through over their working life. Especially if they plan to end up in drawdown. So, why do you think it is good for you?
    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.
    • ColdIron
    • By ColdIron 28th Nov 17, 12:39 PM
    • 3,660 Posts
    • 4,401 Thanks
    ColdIron
    • #3
    • 28th Nov 17, 12:39 PM
    • #3
    • 28th Nov 17, 12:39 PM
    The Target Retirement fund is like a traditional lifestyling pension where you reduce equity risk with a view to purchasing an annuity. Is this your plan? Many regard this as an outdated model. If you retired at 60 you could have another 30 years left in you

    What is your rationale for splitting your funds? Not saying it's wrong but if you didn't have a spare £10,000 would you plan to split the SIPP?

    Just a couple of thoughts
    • BLB53
    • By BLB53 28th Nov 17, 1:54 PM
    • 1,169 Posts
    • 960 Thanks
    BLB53
    • #4
    • 28th Nov 17, 1:54 PM
    • #4
    • 28th Nov 17, 1:54 PM
    Its a good plan to consolidate your pensions and get lower charges and hopefully better performance from a SIPP.

    I think the Target Retirement are fine...fire n forget as they will take care of asset allocation as time passes and you near retirement.

    VLS 60 is also a good choice for the ISA and could also be used for the SIPP if you want to manage the equity allocation yourself.

    The other aspect to be aware is platform charges for the SIPP and ISA and wonder if you have looked into this as some will charge more for holding funds on a % basis.
    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.
    • JDoon
    • By JDoon 28th Nov 17, 2:16 PM
    • 3 Posts
    • 0 Thanks
    JDoon
    • #5
    • 28th Nov 17, 2:16 PM
    • #5
    • 28th Nov 17, 2:16 PM
    Thanks very much for the replies.

    I was looking at the Target Retirement Fund due to it appearing to manage the reduction in risk automatically as I neared retirement. Donít think Iím knowledgeable or confident enough to be able to do this.

    My current company pension also uses the same model and looking at this it seemed the safest option for doing the same with the SIPP but now you have me wondering.

    Never having invested before Iím nervous about making wrong decision but knowing that the various pensions are expensive in terms of charges and donít appear to be performing too well I know need to do something just not sure what.

    It was the same with the VLS 60 Ė set it up and then just leave it alone was my thinking. The idea of reviewing/rebalancing etc is something that Iíd want to avoid as feel Iíd probably do more harm than good.

    Are any of the other funds I mentioned above a popular alternative to the VLS 60 or are there other options that I could research?

    Thanks for highlighting platform charges, Iím trying to workout whatís best with these too and been reading guide on Monevator and this site to try and get better idea.
    • dunstonh
    • By dunstonh 28th Nov 17, 2:30 PM
    • 89,873 Posts
    • 56,541 Thanks
    dunstonh
    • #6
    • 28th Nov 17, 2:30 PM
    • #6
    • 28th Nov 17, 2:30 PM
    I was looking at the Target Retirement Fund due to it appearing to manage the reduction in risk automatically as I neared retirement. Don’t think I’m knowledgeable or confident enough to be able to do this.
    1 - do you need to reduce the risk?
    2 - does the risk reduce in line with your expectations and requirements?

    This is important. Statistically risk reduction results in lower returns in far more time periods than leaving it as it is. The target retirement funds start with higher risk than the average consumer and end up with lower risk than the average consumer. So, statistically, the fund is unlikely to be suitable for you for most of the period you are invested.
    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.
    • Audaxer
    • By Audaxer 28th Nov 17, 7:46 PM
    • 641 Posts
    • 283 Thanks
    Audaxer
    • #7
    • 28th Nov 17, 7:46 PM
    • #7
    • 28th Nov 17, 7:46 PM
    I’m thinking possibly to go for either HSBC Global Strategy Balanced or the L & G Multi Index Fund 5.
    Originally posted by JDoon
    I am retired and just invested further sums in a VLS60 as I think it's a good option. My wife has also invested in HSBC Global Strategy Balanced, which has had similar returns over the past 5 years to the VLS60, but has a different asset allocation with much less UK equity and a bit of property, and the allocation is actively managed. I think it is a good choice if you don't want to put all your eggs into the Vanguard basket.
    Last edited by Audaxer; 28-11-2017 at 7:56 PM.
    • Alexland
    • By Alexland 28th Nov 17, 8:07 PM
    • 736 Posts
    • 462 Thanks
    Alexland
    • #8
    • 28th Nov 17, 8:07 PM
    • #8
    • 28th Nov 17, 8:07 PM
    JDoon - I don't see a major problem with your selections as you would probably be doing a lot better than your current arrangements.

    I agree VTR is targeting an annuity situation where if you are going for drawdown you could probably more risk for longer. Personally I would prefer the L&G in the SIPP.

    Also consider your SIPP platform carefully - with £80k (and hopefully growing) it might be worth considering a fixed price platform such as Halifax/iWeb or Interactive Investor (who appear to be winning awards for customer service at the moment...).

    Halifax/iWeb are cheaper but charge for transfers-in and trading (and have less funds, they are missing the L&G). II cost £30 per annum more but transfers in are free and you get £90 per annum of trading credits. You can also hold your ISA with II for no extra charge but consider if you feel you are putting too much money in one place.

    Alex
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