Thoughts on an old dormant pension pot

Devon_Sailor

dunstonh wrote: »

A SIPP is an experienced investor product. There is more scope for investment selection but that is only of use if you are going to take advantage of that. if you end up using the wrong sort of investments or investments that are better handled in a personal pension then it could end up an expensive folly. If you start buying more advanced investment options or single sector/focused funds then you need to be more in control of your investments and that means regularly reviewing them, rebalancing them etc. Is that your plan? If so, then its all looking like good reasons to consider alternatives (although Std Life may still be suitable for that). If it isnt your plan then a SIPP is not looking like a good option.

As it currently stands, I am not paying into this old pension, and not able to contribute to it either.

In the future, I am expecting a marked increase in 'disposable' (or, more correctly, investment) income, which I want to put into a S&S style account/pension to top up my one from the Navy. My plan would be to transfer this old pension over and use it to get a proper head around a decent size (well, for me!) portfolio and grow it, prior to pumping extra regular funds in in a few years.

I want to take more active control over what my pension pennies are invested in, hence the original question as to whether or not a transfer out would be possible. I now see that it is; this seems to tick your box wrt how I want to invest, so thinking very hard about transferring it into an H&L Sipp.

The process looks pretty straightforward on paper - is it in reality though?!

Regards,

D_S

xylophone

is it in reality though?!

A young relative has recently done this with no problems at all - it was just a matter of filling in a form and waiting to be told the transfer was complete.

Devon_Sailor

Thanks Xylophone,

How are they getting on with self-management?

xylophone

I'll have to ask the next time we meet! He already had an ISA with HL so I suppose it's more of the same?

Devon_Sailor

Well, the bullet has been bitten, and I have sent off the paperwork to transfer over into an HL Sipp, which I find quite exciting - looking forward to getting to grips with things and feeling much more "hands on" with my secondary nest-egg.

I have a transfer value of £12,050; looking at keeping this as my long-term option (25+years), I am happy to take a risk here, without being massively blase about it. On the basis of some research into funds etc, what are thoughts on the following broad portfolio...?

Vanguard 80% (or 100% - undecided!) Equity - 70%
Vanguard US Equity Index GBP Acc Units - 20%
Invesco Perpetual Corporate Bond Acc Units - 10%

Also like the look of Vanguard FTSE UK Equity Income Index, L&G International Index Trust and Invesco Perpetual Monthly Income as substitutes/reserves for some of the above.

Too unbalanced? Too passive? I await your comments/howls of horror at my stupidity with equal eagerness..!!!

vmt,

D_S

Edit:
I have ticked the box to automatically reinvest any dividends in the hope of growing the pot more effectively.

dunstonh

Too unbalanced?

If you use the vanguard lifestrategy funds then there is little point using single sector funds unless you are giving yourself some exposure in areas not covered by the lifestrategy fund (e.g property or specialist). The vanguard fund already has US equity index in it. So why more?

I have ticked the box to automatically reinvest any dividends in the hope of growing the pot more effectively.

Whether you select that or not, it still stays in the pension. Some people prefer to build up cash and use the cash to reinvest in something else periodically. Others prefer to buy more of the same automatically.

Devon_Sailor

Thanks Dunston, some fair points, esp the first. I think perhaps I would in that scenario therefore plump for the 100% equity version to take maximum advantage of any US bump.

So, that leaves 20% of the overall sum to find a nice new home - do you think it would be better to find some other whole world index, or go deep into a specialist field - some of the global pharmaceutical indexes looked quite tempting?

D_S

atush

dunstonh wrote: »

If you use the vanguard lifestrategy funds then there is little point using single sector funds unless you are giving yourself some exposure in areas not covered by the lifestrategy fund (e.g property or specialist). The vanguard fund already has US equity index in it. So why more?



Whether you select that or not, it still stays in the pension. Some people prefer to build up cash and use the cash to reinvest in something else periodically. Others prefer to buy more of the same automatically.

I must admit to using this approach myself in my stockbroker (non wrapped) acct. I collect up the divis and occasionally buy something else.

With other things such as pensions, and investment trust savings plans I just reinvest the divis.