Wife's workplace pension (Fidelity)

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
4 replies 1.2K views
liviboyliviboy Forumite
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Hi there,

My wife was a bit late in joining the pension party, having only joined last March (2015) at the ripe old age of 28 (I'll get a row for that later!).

She had never ever considered pensions before, basically as she felt she couldn't afford it with student loan deductions, etc. I finally managed to convince her she couldn't afford to NOT be saving up for retirement...and it was only when I basically forced her to contact her HR dept. for the information about it that she started to take full notice...but now cares a lot more about it.

There are options for different contribution rates and employer contribution rates. She chose the highest tier of 8% with the employer chucking in 12%.

The pension is a DC scheme run through Fidelity (advertised as a Stakeholder Pension Scheme).

Because the main aim at the time was to simply enrol, we opted for the default fund, etc. which shows on PlanViewer as "FidBlackRock Long Term Fund Class 5". According to the paperwork this is a little bit more "risky" than most, but not within the riskiest solutions. The plan is also advertised as a "lifestyle" plan which will automatically change to less risky investments as she nears retirement.

I'm not looking for advice or anything like that, just a thumbs-up (or down) that what we have done so far is right.

Also, would anyone suggest looking at alternative investment funds or would most stick with the default option?

Wife is currently on maternity leave with first baby, is just about to go onto SMP having had 18 weeks of full salary. She plans to return in November (or December is we can stretch that far...). However normally she earns circa £32,000 in total including salary, shift allowances and occasional overtime.

Personally, I am in the Scottish Teachers' Pension Scheme and have got to know the ins-and-outs of that pretty well, especially with my switch from FS to CARE last April, but as a DB scheme it's very very different to the DC scheme of my wife's employer.

Any thoughts/opinions/experiences welcomed.

Replies

  • dunstonhdunstonh Forumite
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    There are options for different contribution rates and employer contribution rates. She chose the highest tier of 8% with the employer chucking in 12%.

    12% is a very nice amount. Shame she has missed some of that free money.
    I'm not looking for advice or anything like that, just a thumbs-up (or down) that what we have done so far is right.

    its fine for now. However, lifestyle funds have gone out of fashion and many providers are now withdrawing them and forcing fund switches out of them. If you are not buying an annuity or planning full fund withdrawal then they are not suitable. However, you have another 30 or so years before they start "lifestyling". So, no hurry. Plus, the rules will probably be very different by then.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • LHW99LHW99 Forumite
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    She can always get an amount in the default fund as a base, and then look to contribute into a different fund a few years time.

    She should be able to have more than one fund in the wrapper, but would need to check.
  • liviboyliviboy Forumite
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    dunstonh wrote: »
    12% is a very nice amount. Shame she has missed some of that free money.

    its fine for now. However, lifestyle funds have gone out of fashion and many providers are now withdrawing them and forcing fund switches out of them. If you are not buying an annuity or planning full fund withdrawal then they are not suitable. However, you have another 30 or so years before they start "lifestyling". So, no hurry. Plus, the rules will probably be very different by then.

    You don't need to tell me (or her) that it's a shame she missed out. She joined the company in April 2011, it was sold (TUPEd) in October 2012 but the pension scheme wasn't changed from that of the previous owners. 20% a month isn't to be sniffed at going into her pension and she regrets her earlier decision very much. I'll be honest at that time I wasn't overly interested, my pension deduction just came out my salary I didn't really consider it until they started increasing our contributions from 6.4% upwards...then I took notice haha!

    I know she has plenty of time to consider things it was just a check that what we've done so far is at least along the right lines. through PlanViewer she has an incredible amount of flexibility with what to do with the money going in...
  • liviboyliviboy Forumite
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    LHW99 wrote: »
    She can always get an amount in the default fund as a base, and then look to contribute into a different fund a few years time.

    She should be able to have more than one fund in the wrapper, but would need to check.

    I would need to take another look but from all the paperwork it seems very flexible in what can be invested. She can say she wants x% of her contribution invested in Y, x% in Z, etc. But there are hundreds and hundreds of different options. No wonder people get turned-off by the whole thing :-)
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