Standard life managed pension fund help please, should i join?

topcat007

http://uk.standardlifeinvestments.com/SL_P_Managed/getLatest.pdf

Hi all,

the above is the pension scheme my work is offering will be putting 100% of 2% of my wages into that profile if that is the correct terminology

Employee pays 3% i pay 2% (the minimum) is it any "good " or a complete waste of time ?

I haven't joined yet but need to make up my mind soon and am really struggling so much information out there i dont even know what i am reading half the time!

any help is greatly appreciated it really is :j

molerat

£2.50 in your pension pot will cost you 80p from your spending money, does that put a better light on it. Will the employer stump up more if you do ? The contributions are low so additional pension provision will need to be made but the free money will add up. Generally any pension that the employer is contributing to is worth joining. It can always be transferred elsewhere if you move jobs.

atush

Not quite the right terms (as you are mixing employer and employee ie you) but we get the gist.

I haven't looked at your fund choice. Because the most important thing you must do is Join the pension. You can switch your fund choice later if you want. You will be getting 3% of your salary in free money. If you are putting in 2% into one fund, where is the employer's 3% going? Same fund? you can choose more than one.

What you need to ask yourself, is 5% enough in your pension? I don't think so (although you haven't told us how old you are, and if you own your own home, have other savings and investments etc).

Does your employer offer more than 3% if you put in more than 2%? If so, i'd up your contributions if you can.

dunstonh

Employee pays 3% i pay 2% (the minimum) is it any "good " or a complete waste of time ?

Free money is never a waste of time. If you dont join, you are throwing that free money away and having to pay extra yourself to make up for it (or not doing anything at all as you would be an opt out and many will not take on opt-outs).

quotememiserable

I agree with molerat and atush. Yes, its a good thing, and you should think seriously about putting in more - the financially sensible choise is to go for the highest percentage the company will match, in order to max out the free money.

topcat007

Thanks for all your comments they are very helpful, apologies for bad grammar that was done in a bit of a rush.

I'm in my early 20’s, no mortgage , have other savings but they are mostly in cash ISA and current accounts.

The max employer gives is 3% the minimum employees in is 2% we can increase the contribution (but in 2017 this would be a mandatory 4% employee side)

The illustration figures I was given based the intermediate rate which was recommend all the way up to 65 years old instead of managed i.e high risk > intermediate > low risk. Final fund £193,000 based based on my current wage. Which gives me approximately £10,000 taxable per year for a minimum of 5 years? Also have the option to take out 25% tax free but obviously reduces the yearly amount.

Would I best invest the minimum of 2% in the pension, some in cash ISA and then some in stock ISA (although I would have to research stock ISA as I wouldn’t know what I am doing). This way would spread risk with some possible high returns in stock ISA..


Have to be honest don't want to work until i am 65years old (dont think any of us do!) to long in my opinion so want to invest wisely to retire as early as possible but the current market is terrible for savings.

atush

Well 5% is just Far too low. so you need to pay in more.

So, you don't have a mtg. Does that mean you aren't saivng to buy a home? Do you have other savings goals? It won't make sense to put 100% of your spare cash into a pension if you are saving for something.

If you have cash savings enough for 3 months spending, then you could look at filling your S&S isa alongside a pension. this will help you retire earlier.


As a general rule, if this is your first pension, you should put in half of your age as a %. So, the total should be 10% if you are 20. Which means you should up yours to 7% if you can.

It all depends in what other goals you have.

quotememiserable

topcat007 wrote: »

The illustration figures I was given based the intermediate rate which was recommend all the way up to 65 years old instead of managed i.e high risk > intermediate > low risk.

The naming of the default fund set is a matter of constant debate in the pensions community. If we call the high risk low risk, hardly anyone goes for high risk...why would they? If we call them high return low return, everyone chooses high return...why wouldn't they? But of course the high risk fund and the high return fund are the same one, because its a higher likely outturn but with a wider spread between highest and lowest end result.

Getting your head around risk return for a very long term relationship like this will serve you well. Hang around the investment boards a bit.
For my money, long term pension investments should be in high risk. Pensions are fundamentally a low risk investment. What a pension investment manager calls high risk is what a hedge fund manager calls low risk - there won't be any really racy gambles in pension fund offerings.

topcat007

atush wrote: »

Well 5% is just Far too low. so you need to pay in more.

So, you don't have a mtg. Does that mean you aren't saivng to buy a home? Do you have other savings goals? It won't make sense to put 100% of your spare cash into a pension if you are saving for something.

If you have cash savings enough for 3 months spending, then you could look at filling your S&S isa alongside a pension. this will help you retire earlier.


As a general rule, if this is your first pension, you should put in half of your age as a %. So, the total should be 10% if you are 20. Which means you should up yours to 7% if you can.

It all depends in what other goals you have.

Hi there

i am saving every penny i can to buy a house at the minute

thanks for the info on half your age , i will consider it

dunstonh

i am saving every penny i can to buy a house at the minute

There will always be an excuse available to you not pay towards your retirement. Saving for the house, the early years of living in the house and doing it up, married, children, moving to a bigger house etc.