pension contributions?

markymark2020

hi, I am self-employed and have been putting lump sums into different pension funds each year with different companies all in with-profits funds which have not been doing wonderfully. I have £9000 to put in for this year and was going to use one of Martin's discount brokers until I read the threads.

I have been distrustful of IFA's in the past as have met some socially who have told me that their work is easy money.

Any advice appreciated.

EdInvestor

Hi MM

You are certainly thinking in the right direction.WP funds are no longer appropriate for long term saving and it would be sensible to review all the pensions you have already with a view to switching to better performing funds and lower overall charges.

Most conventional pensions are now offering a selection of external funds with decent performance records, so this is not the problem it used to be, but it does depend on the company.You need to check on fund availablility and charges.

You should check first if there are any guarantees attached to a pension in WP - that can make it inadvisable to switch depending on your age.

It's certainly worth using discount brokers/inexpensive online SIPPs, especially if you want to go into performance funds which tend to have high initial charges which the brokers will rebate.

dunstonh

I have been distrustful of IFA's in the past as have met some socially who have told me that their work is easy money.

It pays very well but it isnt easy money unless you take short cuts. However, that goes for any occupation. I cant remember that last time I have worked for less than 10 hours a day. Although I reckon i could knock an hour off that if I didnt keep popping back on here as often

I dont think that you should distrust someone on the amount they earn. You should measure them on what benefit they provide you.

I am self-employed and have been putting lump sums into different pension funds each year with different companies all in with-profits funds which have not been doing wonderfully.

Whats the point of that? Its not proper diversifcation and as many pension providers offer discounts on larger funds, spreading it about amongst providers could be more expensive. I have seen this before and on pccassion put in place by advisers but its old fashioned thinking and obsolete by todays standards.

markymark2020

Thank you both for your advice, wow really prompt, but where from here? T

The idea of going with different funds was to diversify although they are all with-profits.

How do you get good advice on where to put the existing pension pots and start a new one, perhaps finding an IFA who I do have some faith in, I can think of one....

MM

dunstonh

Ok, we know they need reviewing. With profits is old hat now and its possible the charges are higher than modern plans. There may be some guarantees that exist on the exisiting plans which could be valuable and there could also be alternative funds available on them as well.

How do you get good advice on where to put the existing pension pots and start a new one, perhaps finding an IFA who I do have some faith in, I can think of one....

I would like to think most IFAs are fine. A recent survey by Which found that 2/3rds of IFAs were compliant and the things missed by the others were only technical issues on disclosure and not actually advice related (compare that with 2/3rds of tied agents not coming up to scratch in the same research). It is common for IFAs to get the blame for the actions of the tied which can lead to a little distrust.

At the end of the day, its no different to getting anyone to provide a service to you. You often only find out from word of mouth or gut feeling when they speak with you and how they present their information. It may be a case that you have to speak to a few and judge them against each other (without letting them know you are comparing).

Whatever you do, you do need these looking at.

EdInvestor

Have a look at the top 10 in each fund category on this site.These are the type of funds you should be getting into. The pension provider ( eg Standard life Scottish Widows, Prudential etc etc,) is really irrelevant these days. Look for a selection of the top funds at the cheapest charges you can find, whether it's one of the insurers or a Sipp ( or both).

https://www.citywire.co.uk/Funds/Home.aspxr

markymark2020

thanks ed, will look at that but have booked an appointment next month with an IFA who I trust so will weigh up the two and decide what to do.

many thanks again