Paying in to more than one pension

dave23

Hello I am looking for some help in what to do with my pension pots.
I am 54 and currently no plans to retire until 67. Until recently I was paying into a Scottish Widows stakeholder plan with my employer. Current value is £39000 and is in Pens Portfolio 2 and Pens Portfolio 3. It has been in Lifestyling since 2012 so it is moving to 100% portfolio 3. Annual charge is 0.7%.

I have now been TUPE'd to a new employer and joined their DC scheme. It is with L&G, balanced approached with lifestyling from 2017. It is a multi-asset fund with 0.61% charges. I contribute 10% via salary sacrifice and employer 7.5%. Current salary £38000.


Scottish Widows say I can either transfer out, leave it in or I can continue to make my own payments. I was considering transferring it because the performance has not been spectacular over the last few years but the new scheme is administered by a management company who have not been very helpful with providing me with fund information and the plan is not available to view online so I will just get a yearly statement

I have an Aegon plan from a previously employer, it is a Group Personal Pension. Current value is £45000 and is UK Equity 50%, High Equity WP Fund 50%, annual charge is 1%. Considering how much was paid in to it this plan has done very well over the years but the UK Equity is considered above average risk so should I move it some point

I also have a deferred DB pension which will start from 65 and the last valuation I had in 2014 was £7080 and even though I was contracted out for many years I should qualify for the full state pension eventually. So I do have the option to retire at 65 if there is enough money in the pots.
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I was considering starting to pay £150 a month into the SW scheme or starting a SIPP with Vanguard Lifestrategy 60 and maybe transfer all my pots into at retirement, or would it be better just to pay in more to the L&G?

Any thoughts

atush

AS to leave or transfer, all depends on charges, investments avaialbe re: costs. And any guarantees.

Make sure your get a valuation each year for your previous DB pension.

Then, your lifestyling. Do you want to buy an annuity? Or will you DD and keep invested? Do you have sufficient savings?

You might not want to be lifestyled (ie going to cash out of equities)?

jamesd

What do you take the phrase "above average risk" to mean? In terms of what risks you think it means and effect on growth potential, say.

dave23

Hello Jamesd on the fund fact sheet it is described as being above average risk and is 100% UK equities.

Atush at the moment not sure about annuity but have plenty of time to decide as with both SW and L&G scheme both say it will only make a difference from 60 when they will start to move towards cash

dave23

I have a cash fund in various interest paying bank accounts approx £14k and I recently started a S&S Isa paying £100 a month into VLS 60

AnotherJoe

It has been in Lifestyling since 2012 so it is moving to 100% portfolio 3.

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The problem with lifestyling is that it was all well and good when you got to pensionable age and took out an annuity. But you are planning to work for another 13 years so lifestyling in this case, not that I know what portfolio 3 is, probably is the wrong thing to do as you'll be minimising your chances of growth and be in a lot of bonds and cash. Did you originally tell your employer you were going to retire around now?

dave23

When I started the SW pension 10 years ago that was the only option the company made available. The choice was adventurous, balanced or cautious and I went for the balanced. It will only make a difference from 5 years to retirement as up to then the plans follow the same path. Portfolio 3 is 49% ex UK equity, 21% UK equity and 30% bonds so it will stay in Portfolio for the next 11 years as the original scheme retirement age is 65

jamesd

dave23 wrote: »

Hello Jamesd on the fund fact sheet it is described as being above average risk and is 100% UK equities.

But what do you think that means?

dave23

Hello Jamesd I presume it means that in a stock market crash it will lose more value than a fund that includes a percentage of bonds. I am aware that it has a greater potential for growth over the long term but from what I have read being 100% in shares is high risk and 100% in UK share is not good, so at some point I need to de risk to include bonds in the fund.

AnotherJoe

dave23 wrote: »

Hello Jamesd I presume it means that in a stock market crash it will lose more value than a fund that includes a percentage of bonds. I am aware that it has a greater potential for growth over the long term but from what I have read being 100% in shares is high risk and 100% in UK share is not good, so at some point I need to de risk to include bonds in the fund.

That point would most likely not be 13 years before retirement though, especially so if you don't then intend to take an annuity. That's re bonds.

dave23

So I may as well leave the Aegon alone for a few more years then. So back to my original question, pay more to works pension, continue to pay into SW or start a SIPP, which makes more sense?