Is my Standard Life pension any good?

Frazer

I've been putting off increasing my pension contributions because I'm not sure that my Standard Life pension fund is the right place for my money. I'd like to feel more confident in it so that I can do some proper saving.

I have paid in 58k since starting in 1997 and now it's worth 84k, not counting any transfer penalties. I make that an APR of about 3%, which is not very impressive. Does anyone have any opinions on the investments that I have listed below? Could I do better elsewhere? I'm 42, so I hope it's not too late to adjust things.

SL Pension With Profits Fund: 32% total, no new contributions
SL Pension Millennium With Profits Fund: 31% total, no new contributions
SL Pension FTSE* Tracker One Fund: 4% total, 50% new contributions
SL Balanced Lifestyle One: 33% total, 50% new contributions

One flaw that jumps out at me right away is the split between a balanced fund and a tracker. One might be cancelling out the other. I think I should have gone for either a 100% "lifestyle" fund or a 100% self-selected list of funds.

Any ideas please?

ColinJS

You really need a thorough review if you believe the investments are not appropriate. Speak to an IFA who will assess your attitude to investment risk, taking into account your objectives, circumstances etc. Having obtained all of that then the IFA will advise suitable alternative strategies.

So the question shouldn't be 'am I investing in good or bad funds?' but more 'how likely am I to achieve my goals?'. This is the only way to invest in a sensible manner, in my opinion.

EdInvestor

Have a look at the current investment mix of the two WP funds in which you have 60 % of your money.One of them at least is likely to be a non performer mainly invested in bonds, though it may have guarantees. You are some way off retirement so could perhaps take more risk to get bettter performance.

Check the Balanced fund mix as well - it may be similarly sedate.

What other funds are on offer?

Frazer

ColinJS wrote: »

You really need a thorough review if you believe the investments are not appropriate. Speak to an IFA who will assess your attitude to investment risk, taking into account your objectives, circumstances etc. Having obtained all of that then the IFA will advise suitable alternative strategies.

So the question shouldn't be 'am I investing in good or bad funds?' but more 'how likely am I to achieve my goals?'. This is the only way to invest in a sensible manner, in my opinion.

Thanks for that perspective. Let me put it another way. My pension seems to be delivering 3% on average. The pension calculators on the web assume much higher rates - 5% or 7% - and their results are still frightening. So my goal is to make my pension match or exceed the assumptions made by the calculators. I take your point about seeing an IFA - I shall probably do that initially, although I hope to be able to work things out for myself in the longer term.

EdInvestor wrote: »

Have a look at the current investment mix of the two WP funds in which you have 60 % of your money.One of them at least is likely to be a non performer mainly invested in bonds, though it may have guarantees. You are some way off retirement so could perhaps take more risk to get bettter performance.

Check the Balanced fund mix as well - it may be similarly sedate.

What other funds are on offer?

I had never thought of looking at the investment mix of the WP funds, as I assumed that they were some kind of secret recipe. In fact, it turns out that one of them is 80% fixed interest and the other is 43% fixed interest and 40% equities, mostly UK. That is, as you say, quite sedate. The Lifestyle Fund is currently 73% in equities, and its past performance looks consistently good. Maybe I'd be better off moving it all into the Balanced fund, if that's allowed. This fund automatically moves into safer investments towards the end of the term, so it's not as risky as it sounds. But I'll take advice before I do anything major.

To answer your last question, SL have more adventurous "Lifestyle" (i.e. time-varying) profiles based on global equities or 50:50 global:UK equities. These might suit me more, as long as I can take the risk.

EdInvestor

What level of MVR penalty is being charged at present if you want to switch out of Standard WP funds?

Do you have a guaranteed investment return (GIR) on one of them (possibly 4%)? If so, are you being charged an annual fee for that GIR, if so how much?