Transferring a Pension

Tammy2

It's a Legal & General one called Group Personal Pension 2000.

jem16

Tammy2 wrote: »

It's a Legal & General one called Group Personal Pension 2000.

Ok from the looks of that it has a few investment funds so you would need to say which particular fund/s you're invested in. What does your documentation show?

The only info I can find does state 1% charge but as I said it is quite possible that your Group plan has negotiated better charges so you really need to find out what these are.

Tammy2

I haven't been able to find out anything specific. I think I'm going to have to ask them for another copy of members booklet.

jem16

Tammy2 wrote: »

I haven't been able to find out anything specific. I think I'm going to have to ask them for another copy of members booklet.

So does your latest statement not give you the fund name/s?

dunstonh

The default charge on that is 1% p.a. It can be cheaper depending on how it was arranged. That is cheaper than the Fidelity SIPP.

jamesd

Tammy2 wrote: »

I haven't been able to find out anything specific. I think I'm going to have to ask them for another copy of members booklet.

The generic booklet is here. Some additional information is here and that also links to a list of available funds.

Tammy2

Right, I've managed to log into L&G and got some more info.

It says the name of the investment is the L&G Triple Fund L/S Profile. It goes on to say that by my selected retirement age my pension will be invested 50% in the L&G Index linked Gilt Fund and 50% in the L&G Fixed Interest Fund.

jem16

Tammy2 wrote: »

It says the name of the investment is the L&G Triple Fund L/S Profile. It goes on to say that by my selected retirement age my pension will be invested 50% in the L&G Index linked Gilt Fund and 50% in the L&G Fixed Interest Fund.

So this one? Probably the default Lifestyle option.
https://www20.landg.com/DocumentLibraryWeb/Document?lgrouter=CommApp&targetApp=MANAGEYOURSCHEME_DOCUMENTLIBRARY_ENTRY&reference=W12460_LLE3.pdf&ydat=13b4bcb4b33b9d7b005215500200000013b4bcb4b33c2b920052155102000000

Tammy2

That's the one

jamesd

So, going back to your original question about risk and changing investments, is that fund suitable? It is of a type called "balanced managed" and these vary a bit but in general could go down by up to 30% in a bad year, while a fund using pure shares could go down by 40-45% in the same situation. On a risk scale it'd probably be rated medium or medium-high risk based on that potential drop range. For a pension those routine drops aren't a direct concern because it's long term investing but they can scare people who don't know that they are normal.

For people who plan to buy an annuity at the retirement age given, a drop just before that could be a big problem and result in a real loss of long term income, so that's where lifestyling comes in. Lifestyling reduces potential growth in the last few years in exchange for reducing the chance of a big drop just at the end. If you're flexible about when you retire or don't plan to buy an annuity or pay off a mortgage you don't really need lifestyling and in any case now you know about the funds you can just go in and change what you pick when you want to do that. So if you think you'll continue to pay attention I suggest that you turn off lifestyling.

If you can handle a bad year with 40-45% drops once or twice every ten years in the midst of general growth I suggest that you consider a global/international fund. It looks as though the Legal & General International Fund is of this type. However, it's performed less well than the alternative Legal & General Newton International Fund so I suggest that you pick that one out of these two pure international funds.

Neither of those has any substantial UK investments so you should also put 10-20% into one or more UK funds. Rather than making a suggestion I'll leave you to explore for a while.