TSB / Axa / Aviva - My brain hurts!

mrT0m

I'm 39 and took out a TSB pension when I was 19! 12 years ago I joined a scheme through my employer AXA SunLife.

I transferred the TSB one (19k i think) into it a few years later to keep things simple. I was contracted out but six years ago based on advice I reversed this descision.

Currently I am self employed and pay a paltry £52 (Net) into it each month for the last three years and prior to that it never exceeded £100 (Net).

AXA SunLife (Friends Life?) - Individual personal pension
Managed 50%, Global Equity 25%, Japan 25%

Non-potected (whatever that means):
Global Equity, 70 units = £863 value
Japan, 323 units = £739 value
Managed (capital), 323 units = £2,793 value
Managed (Accumulation), 724 untits = £18,880 value

Protected (whatever that means):
Managed (Accumulation), 828 units = £21,557 value

Total fund value £44,853

Not sure what to do with this, my gut tells me it is performing badly. Thinking of either switching or stopping payments and investing in a non pension product.

Oh, I also worked for Norwich Union for two years and somehow got a pension: Aviva SPS Diversified Growth Portfolio, 5941 units = £8,313.

Any pointers greatly appreciated.

dunstonh

my gut tells me it is performing badly.

25% in Japan! its not likely its performing badly. My gut tells me (without looking) that you will be getting around sector average at best.

Thinking of either switching or stopping payments and investing in a non pension product.

Pensions have nothing to do with performance. So, picking a different tax wrapper isnt going to make the slightest difference on that front.

Any pointers greatly appreciated.

Learn the difference between tax wrappers and the investments within them first. You are comparing cars and petrol at the moment. Understand what you have, what you want and the use what is best to get you there.

mrT0m

Thanks DunstonH for your input.

My post wasn't triggered because of Japan - I appreciate a pension is a very long term investment.

"Pension have nothing to do with performance" - This is lost on me sorry, surely the whole point of holding a pension is performance. I appreciated funds and management of said funds varies within a pension (pension = wrapper?) as well as costs but how are two seperated - i presume by switching funds based on acceptance of risk?

Talking of costs (fees) is it easy, to find out how mine compare with industry averages for newer pensions as I understand that this can have a major impact on returns of the long term.

Sorry if i'm appearing dim here

Lokolo

I will try and explain.

You have investments. So for example your Japan investment.

This investment would be held in a normal Investment Account, Stocks and Shares account, or a Pension account. All these have different advantages and disadvantages. The big thing is a pension is for your retirement so you cannot get access, but for this, you get tax relief for contributions.

It's the actual investments inside which effect performance, not the wrapper (the wrappers are the things I said earlier, so an ISA, Pension etc.).

So if the Japan investment went down 10%, it would go down 10% in a pension and an ISA. So taking the investment outside of the pension won't change performance.

mrT0m

Thanks that makes sense, I get that - apples from all the fruit and veg sellers on the market are influenced by the current situation of apple supply - thats a rubbish analogy but i get it, honest!

Is it possible to pass any jkind of udgement on my current provsision e.g.

Fund provider(s)
Fund types
Fund value considering contributions
Typical fees from this provider
etc...

Actually i think thats asking too much with limited info.

dunstonh

To follow on with a bit more...

With conventional investments you can hold them unwrapped (directly - not in any tax wrapper) or you can hold them in one of a number of tax wrappers. So, if you placed say Invesco Perpetual High Income fund in an ISA, a pension, an investment bond or held it unwrapped then the returns would be the same. The only difference would be the tax and the charges (same fund largely giving you the same charges). So, if you are not happy about the performance of a fund, then the tax wrapper (pension, ISA, bond or whatever) wont make any difference.

Is it possible to pass any jkind of udgement on my current provsision e.g.

Fund provider(s)
Fund types
Fund value considering contributions
Typical fees from this provider
etc...

Specifically no. However, my gut feeling is that you can get cheaper and better without too much effort. Your contracts are old so could be expensive compared to modern options, your funds are basic (which isnt necessarily bad) and your sector allocation is dire. The Japanese exposure is way over the top and shows the danger of being too heavy in one sector.

Loughton_Monkey

I think you could do with a bit of a 'makeover'.

But before rushing in at the deep end nit-picking about funds, your primary focus should be on how much you invest in a pension anyway. You are possibly halfway through working life and probably - in an ideal world - should have about £60K to £100K wrapped up by now (depending upon your spending).

Then, with a sensible level of contribution, may be you should seek IFA advice to get a cost-effective pension with decent funds, and a far better spread. There are funds that are excellent for 'lazy' investors - which are quite balanced. Nothing wrong, in principle, with specifically 'biased' fund focus as long as that focus has been created deliberately and is well monitored, and frequently reviewed.

Lacklustre performance will have been partly as a result of Japan, which has 'withered on the vine' for the last 10 years or so. It is a matter of extreme irony that for the last 6 to 9 months, Japan seems to have woken up and fund performance was improving heavily.

Until last week.......

trina2010

the protected and non protected that you mentioned in your first post refer to contracted out contributions, definitely have a read through on this because having them can dictate how that money can be taken in benefits on retirement (unless the rules have all changed by then which lets face it is a real possibility with all the changes being made next year).
If you want to have a look on what your invested funds are based on you can find them at http://www.axasunlife.co.uk/pensions/traditional-pension-funds/
that will tell you what the funds are based on and what they are invested in.
Yes AXA sunlife are now Friends Life so that web address may change, but hopefully it will give you something to mull over a bit as the rebrand has only begun in the last week.

jem16

MiP wrote: »

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MSE does not allow self promoting from firms - spam reported.

dunstonh

We at SPAM COMPANY offer a unique and innovative service to review the performance of your investments and pensions

If its unique and innovative then how come virtually all servicing IFAs can do the same?

mrT0m

Thank you to everyone for their help.

Excluding MiP of course. :silenced: