Very long term pension scheme

aj3001

Being 18, in a full time job, in a few months I will have the oppurtunity to contribute to a pension scheme (I pay 3%, company pays a further 3%) the pension will be with Legal and General, what will be the best thing to do with this occupational scheme? What would be the best fund considering the long term investment it will be in there for

dunstonh

6% at 18 is a great start to your retirement planning and will stand you very well.

The best funds will be those most appropriate to your risk profile for the length of time you are investing. Depending on what funds are available on this pension and your views on risk, would depend on the choice.

Dont look at one fund though. Use several, use 8-10 and spread it round. There is no one best option. Over the years some will be better than others.

aj3001

Due to my personality I think I will be in the high risk funds eg Property, and the others! (worked for Norwich Union for 6 months and can't remember the other funds!)

I was thinking, due to the length of time maybe a with profits fund could be good

dunstonh

property is low risk. It isnt residential property but commercial property and focuses on rental income and not necessarily increase in value of the property (which is lower with commerical). That said, it should form part of anyones portfolio.

I was thinking, due to the length of time maybe a with profits fund could be good

You spent too long at NU. You have been brainwashed Avoid with profits totally.

Titan

aj3001 wrote:

Due to my personality I think I will be in the high risk funds.

I was thinking, due to the length of time maybe a with profits fund could be good

The first statement really doesn't tie in very well wih the second statement! With Profits funds must be one of he lower risk investments out there, I'd prefer to put money on deposit somewhere, I'm sure I'd make more and at least would avoid those MVA/MVR charges if I change my mind!!

As advised above, avoid With Profits funds like the plague! If you want high risk/potential better return, then invest in equity funds, consider specialist funds as well like "Special Situations" or some "undervalued" type funds.

Best of luck choosing your funds


Titan

aj3001

Ok thank you for the responses so far, another question (I wont spam the board openeing another topic), the company I work for say I can give a minimum of 3% into my pension fund, and they will match it, up to a maximum of 3%!, I know they will only pay 3% but should I pay more in? Considering I am only 18, and there will be 40 years until I cash it out, or should I stick with 3% and put more money in other savings?

EdInvestor

I suggest you put more into other savings, as you'll probably need a deposit for a house some time and once the money goes into a pension you can't get it out.

What funds are available for you to invest in with the L&G Pension?