400k pot to make a joint pension, but how to do it?

mike88

I would be more inclined to use a selection of funds from the equity and bond or cautiously managed sectors such as these showing performance over 3 years:

Henderson Cautious Managed
Christopher Burvill
Jenna Barnard
John Pattullo
A Rated
selection starpick
28.22%
► AXA Framlington Managed Balanced
Richard Peirson
AA Rated
selection
27.85%
► Cazenove Multi-Manager Diversity
Marcus Brookes
Robin McDonald
AA Rated
AA Rated
selection
23.37%
► Ecclesiastical Higher Income
Robin Hepworth
+ Rated
selection starpick

Only suggestions of course and emphatically not a recommendation.

kidmugsy

Taoism wrote: »

Are there any other vanguard lifestrategy type funds which would diversify the fund aspect of things or need I work out other index tracking options? I can't find any 'fund of funds' which get decent reviews.

I don't like the idea of FoFs - paying two levels of fees doesn't appeal.

For good discussion of "tracker" type funds, I suggest you look at the "monevator" blog. The writers there return to the issue quite often: look through their past posts. For the costs of different platforms, again look at monevator and also the lang cat
http://langcatfinancial.co.uk/2014/04/oh-feeling-aegon-dances-ceiling/

Lastly, reducing your tax bill. I suggest that you start your ISAs with bonds (e.g. gilts or, for example, an ETF of corporate bonds) not equities. That way the interest on the gilts/ETFs will be tax-free. Also, invest enough in gilts tax-exposed to use up all or part of your unused personal allowances against income tax (if you have any unused). Meantime buy your equities tax-exposed: as you will be paying income tax at 20% there will be no extra tax to pay on your dividends. In a way this is an argument against bundling up your bonds and equities together at Vanguard - that bundling costs you an opportunity to reduce tax payments.

Over time, of course, you would begin to move your equity investments into ISAs too, principally for protection against Capital Gains Tax.

Or at least put these propositions to your IFA: he might be able to come up with better advice, perhaps concerning your own particular financial circumstances, and the new £5k, 0% tax band for savings in 2015-16.

While we're at it, do look at the threads elsewhere on MSE about using interest-bearing current accounts to best advantage.

joerugby

Take a look at Equity Income funds. Our 2014 portfolio comprises:

Invesco Perpetual High Income Inc
Invesco Perpetual Income Inc
Artemis Income Fund Inc
JO Hambro UK Equity Inc I Inc
Threadneedle UK Equity Inc Alpha Ret Inc
Threadneedle UK Equity Inc Ret Inc
Fidelity Enhanced Inc Inc
Marlborough Multicap Inc Inc
Troy Trojan Income I Inc
Rathbone Income Inc
Newton Global Higher Income Inc
JP Morgan Global Equity Inc A Inc
Aberdeen World Growth & Inc Inc
Newton Asian Income
Newton Emerging Inc
FP Argonaut European A Income


Our strategy is to live off income received and leave the capital invested. We do have other sources of income and some cash.

In 2013 (on a slightly different portfolio) we received 4.4% income net of basic rate tax and achieved about 12% capital growth.

This year our target is 4% net income and I'll be happy with zero growth - we're down about 2% at the moment.

This is not a recommendation, just an avenue you might want to explore further.

ColdIron

Taoism wrote: »

Tax wrappers I am starting to understand. Seems like we have approx 36k pa we can wrap after July

A quick point regarding tax wrappers (ISAs). If you are a basic rate taxpayer you pay no additional tax on dividends from equities. Bonds however pay interest and you are liable for income tax on these. If you have a mixture of separate equities and bonds you are usually better to put the bonds into the ISA first. You may want to note that the VLS 40 pays interest as it's mostly bonds while the VLS 60 pays dividends, don't base your decision on this, just keep it in mind

ISAs also shield you from Capital Gains tax but that's another matter

Taoism

Thanks for all the responses. I will take some time to think and digest.