Pension Pot?

dunstonh

RichardS wrote:

So how much (approx) would I pay an advisor to come up with a portfolio for me and service it every few years??? And would I then just phone Standard Life and say - look, take me out of the Managed Fund and put X% here and Y% here and Z% here. Is that how it works? Would I need to find a local advisor near to where I live or does that not really matter?

If there is no trail commission being paid to the advisor and you dont use the scheme IFA, then a quick transaction like this should cost around £50 plus VAT. per time. Do it once every 3-5 years and you should be fine.

It would involve verifying the risk profile, recommending the funds to be selected and completing the standard life fund switch form (yes there is a form).

You dont have to use an advisor locally if you dont want. Its not a full advice transaction, just a focused single advice area. Paperwork is limited and is nothing that couldnt be done through the post or email.

RichardS

EdInvestor and DunstonH. Thanks for your advice and help. Its appreciated. I may look into doing something. I don't have any savings because at the moment my priority is to pay off some debts I still have. At the same time I keep my pension payments going and I also try to overpay a little on my mortgage if I can (I have a red letter endowment). Once the debts are clear I think I will look at building a cash fund somewhere. In the meantime I may look at my pension portfolio. Thanks again. Richard

EdInvestor

RichardS wrote:

I have a red letter endowment

Ah. Perhaps this is where the missing cash ( or acclerated debt repayment)might be found Perhaps you would like an evaluation of this? If so post some figs:

Guaranteed sum assured
Declared bonuses
Surrender value (call up and ask)
Monthly premium
Maturity date

[If it's also with SL, and in With Profits, you should keep it until after the DM for the windfall, but post the figs anyway so you'll know what to do after that.]

Actually Richard, your situation looks like an extremely common one to me, there may be many Moneysavers who might find this thread quite useful. If you look at the sheer size of that fund your pension is in (something over 11bn pounds) it's quite massive.Most of the big insurers have these giant Managed funds, and they all have much the same investment profile.

I'd be very unsurprised if there weren't many other risk-averse people like you with money in there, who would be very surprised to discover the risks their pension was being exposed to. It's my general impression that excessive risk is a feature of UK pension investment and that many people could be well advised to take a look "under the bonnet" and see if there should be a bit of adjustment.

The trick is to reduce the risk, but not the returns.As DH says, it's quite possible, just needs a bit of fine tuning.

RichardS

Its with Countrywide Assured. I'm not sure of the figures but the target is £110,000 and the last time they wrote to us with the three projections (at 4%, 6% and 8% or whatever they are now) it was still going to be a few thousand down even at the highest return. I have a flexible mortgage so my aim is to overpay on this over the next 16 years to offset the underperforming endowment. I must admit I am a bit suprised about the risk in the pension. Maybe when I took out the pension I said I wanted medium risk, not low risk. And perhaps that's about right.

EdInvestor

Hi Richard

Which of the Countrywide funds is it in? ( let me guess, the Managed fund? )

If you have a flexible (do you mean offset?) mortgage, to make these mortgages really work optimally, you should have around half the mortgage amount on deposit, ie 55k.Yet you say you have no savings?

You may well be better to cash in the endowment and apply it to the offset, thus killing two birds with one stone - improving your asset allocation, and improving the cost of your mortgage [Paying off high interest debt would be another area to look at.]

But post the S/V, current value, name of the fund, plus the projections so we can see.

RichardS

No, I meant a flexible mortgage as in I can make overpayments, I didn't mean an offset one.

RichardS

And yes, its in the Countrywide Assured Managed fund ! :-)

EdInvestor

http://www.trustnet.com/life/funds/perf.asp?sec=bal

One of these then, Nos 88 and 89. Skightly below average performance.

The investment profile of this fund will be the same as your pension - 80%+ in equities. These so-called balanced managed funds ( and the With prtofits funds which were invested on the same basis ) have a lot to asnwer for - they are just too high risk for pensions and endowments IMHO, it's the reason people now have such problems. I doubt most people are aware their money is invested on this basis.

RichardS

There's not a lot I can do about that though, is there?

dunstonh

You could switch funds to some of their alternatives and have a better spread.