The Cavendish Online FundSupermarket Pension

SnowMan

Retyre wrote: »

On the Cavendish site for this new pension product their model portfolios list "Inc" rather than "Acc" funds. Thought the general wisdom was "Acc" for pre and "Inc" for post retirement?

I would stick clear of all 'model portfolios' including the Fidelity ones, and wealth 150 lists etc etc. My view is that you are just increasing your investment costs through using expensive funds without any corresponding expected return to compensate.

There is no shortcut to doing some basic research to understand risk and return and choosing your own portfolio. Clicking on a button to say you are high risk or low risk and expecting the resulting model portfolio shown to meet your needs is asking for trouble in my view.

Pre retirement using 'inc' funds leaves you with the issue of reinvesting the income, but then using 'inc' funds gives you extra funds with which to rebalance portfolios and to pay fees etc. But it is really of limited importance for platforms that don't charge you for buying or selling funds.

crystal_pixie_2

SnowMan wrote: »

Of course you will be aware of the need to distinguish between a) the platform to use for your SIPP and b) the underlying investments that you hold within that SIPP.

Your comment about 'not doing very well' I'm guessing is more relating to b).

There is a lot of information on monevator about choosing a good passive selection of investments to go within your SIPP (and lots of useful info about understanding risk and return) have a look at

http://monevator.com/category/investing/passive-investing-investing/

My underperforming pot is a SERPs opt out pension with few benefits that was set up in 1991. So this will be my first experience of SIPPS - but I have done my research and both HL and Fidelity seem to have lots of advice and information if you are new at investments.

Retyre

Interesting piece here re Acc and Inc:

http://www.thisismoney.co.uk/money/experts/article-1689160/Which-fund-is-right-for-my-pension.html

I'm still not sure whether with Inc you have to reinvest the Income yourself(extra admin)?

Thanks for your thoughts Snowman, I've been trawling the funds list for a couple of days but I'm struggling to find a better balance/performance than in the model portfolios listed?

SeekTruth

crystal_pixie wrote: »

My underperforming pot is a SERPs opt out pension with few benefits that was set up in 1991. So this will be my first experience of SIPPS - but I have done my research and both HL and Fidelity seem to have lots of advice and information if you are new at investments.

Doesn't this 'SERPS Opt-out pension' have an associated Guaranteed Minimum Pension (GMP)?

SnowMan

SeekTruth wrote: »

Doesn't this 'SERPS Opt-out pension' have an associated Guaranteed Minimum Pension (GMP)?

It will just be a protected rights fund (that is now treated exactly the same as non-protected rights).

There will be a contracted out deduction (equal to the GMP revalued at section 148 orders) applied to crystal pixie's state pension calculation to offset the SERPS for any contracted-out period from 1991 to 2007.

SnowMan

Retyre wrote: »

I'm still not sure whether with Inc you have to reinvest the Income yourself(extra admin)?

Yes you do, unless there is an automatic reinvestment option, but if you are going to do that then you might as well have acc units in the first place

I've been trawling the funds list for a couple of days but I'm struggling to find a better balance/performance than in the model portfolios listed?

Each to their own of course, and what you are comfortable with etc, but the model portfolios wouldn't be something I would touch.

Remember that many studies have shown that there is next to no correlation between past performance and future performance.

Something like the slow and steady portfolio, with the gilt element adjusted to adjust risk, would be my suggestion for further investigation

http://monevator.com/the-slow-and-steady-passive-portfolio-update-q3-2014/

or simpler still a Vanguard Life Strategy Fund

I'm not a fan of gilts or corporate bonds at the moment, but you will probably need something to water down the equity risk, so another option to do this is to use a best buy cash ISA alongside a predominently equity based SIPP, but you have to consider relative tax advantages and other considerations if doing that.

Retyre

Thank you Snowman.

I wrote to Cavendish who told me that with the "Inc" units or I can choose to have the Income paid back into the units it comes out of.

Is anyone doing this in practice on the Funds Network platform please?

greenglide

I have Inc units in fidelity and they are set to automatically reinvest in the fund they are paid in.

There is no extra complexity etc, it is quite common practice this as you get to see the dividends being reinvested rather than the value of the units going up. It is just a warm feeling seeing the money being paid but it makes no real difference to the performance.

Retyre

Anybody using/setting up this new Cavendish Plan?

If so please share your experience with it.

I understand it won't be truly online for a little while?

gpu

With the "Cavendish Online FundSupermarket Pension" you can't switch your funds online so not really my definition of an "online" pension.