Pension quest

digannio

I'm on the lookout to increase my pension pots over the next seven years with help from the tax boost on offer. I took early retirement and currently get a small works pension that is index linked and qualify for a full state pension in eight years time. I'm a non taxpayer and also have a Scottish Widows pension account (currently about £30,000) along with a works pension account invested through Fidelity which is currently around £13,500 and cannot be added to.

I'm in a position to start another pension account to boost these pots. I would be able to put in £2,880 a year which I believe would be increased to £3,600 through the Government. What I intend to do is add this new pot to the Scottish Widows pot and the Fidelity one (whatever they are worth) to buy an annuity (or whatever else they come up with by then) in seven years time. I do also have a fair spread of savings and investments elsewhere.

Basically I am looking for a low cost fund. The Aviva stakeholder pension seems to be one of the cheapest around at 0.55% and includes a lifestyling element. I suppose I am really looking for a low-cost, low maintenance, multi asset account. I know it is generally perceived that stakeholder pensions are old hat and lacking in choice but this one did seem to fit the bill.

I'd appreciate any thoughts on what may be suitable in this kind of situation and timescale.

mania112

I can't say i've seen the Aviva Stakeholder for that price? I'm also sure that Lifestyling is a feature of an investment, not of a pension contract. So I wonder if you're looking at the price of an investment - to which you need to add the cost of the contract (probably 1% pa).

However, I do agree that Aviva's Mixed Investment range offers good value for money.

dunstonh

Basically I am looking for a low cost fund.

fund or pension?

The Aviva stakeholder pension seems to be one of the cheapest around at 0.55% and includes a lifestyling element

Although not the cheapest and why would you want to create a third pension product when you already have two? Consolidation will improve terms. Indeed, the SW retirement account has charges that are tiered (as do most modern plans).

I know it is generally perceived that stakeholder pensions are old hat and lacking in choice but this one did seem to fit the bill.

Based solely on the content of your post, it does not fit the bill as consolidation would almost certainly be the cheaper option.

digannio

Thanks for your help dunstonh. In answer to your first question I was referring to a pension fund, like the Aviva Mixed Investment Fund.
Is it usually more advantageous to bring everything together into one place in order to get cheaper costs? I don't have any valuable guarantees attached to the SW one and there is no MVR if it is moved. To be honest the reason why I was looking to start up another was on the grounds of leave well alone with the SW and Fidelity one as they have been performing quite well.
I also was not sure whether there would be much added value in getting some advice on this as the amounts are relatively small. Are you saying that an advisor is likely to be able to do that with this kind of amount in pension pots together with the future amounts that I would be contributing? What kind of ball park figure would I be looking at?

dunstonh

Is it usually more advantageous to bring everything together into one place in order to get cheaper costs?

Yes. Although it is not a 100% rule.

To be honest the reason why I was looking to start up another was on the grounds of leave well alone with the SW and Fidelity one as they have been performing quite well.

Most modern full feature plans have whole of market access. So, you can get access to the same or similar funds.

I also was not sure whether there would be much added value in getting some advice on this as the amounts are relatively small. Are you saying that an advisor is likely to be able to do that with this kind of amount in pension pots together with the future amounts that I would be contributing? What kind of ball park figure would I be looking at?

Difficult to say. However, I would estimate around 9 out 10 cases I see result in lower charges than those currently held when including the cost of advice.

digannio

Food for thought, thanks very much for your help.