Intro Pension/SIPP Fund Advice

johnD17

Ah so my fund charges 1.46% annually.


One question I have is how can/can you change the funds through the life of investment i.e. start riskier and go low risk towards retirement.


AMENDED: second question. How do charges work for transferring funds on HL. i.e. will I still be required to pay the annual HL fund fee if my money has been there for a few weeks and I transfer to another fund?

johnD17

thanks for the above listed funds, have dumped charges and past performance in excel to compare.


further questions (sorry)


1) would fund choice would differ if amounts were much larger?
2) surely assumption of 5% per annum interest on a relatively low contributions, over c. 20 years wouldn't be 'enough' for a pension? When looking at projections from company pensions (i.e. Co-op, Aviva) I've had in the past and transferred out, there projections would provide a pension 'salary' from only small contributions (I take the point that the company often matches the contributions).

johnD17

another newbie question, specifically looking at funds like Vanguard life strategy, they have different % in equity, what is the remainder made up of? and what is the typical split for a pension?

Further, when I've done more reading I am likely to post about a fund for a shares ISA for my dads inheritance to invest on behalf of my mum, would a similar fund be used, or should the make up of the fund and risk be different, as this would be 'less' long term, low risk and c. 5+ years.

Alexland

With Vanguard the rest is made up of bonds - long term loans to governments and companies that pay interest.

These are more risky than a bond you might get from a bank as the bonds are valued at their second hand rate depending on the attractiveness of their interest payments. At the moment interest rates are low so people have been paying a premium for bonds with higher rates. The concern is this might unwind if rates start rising.

https://www.vanguardinvestor.co.uk/what-we-offer/life-strategy-products

Multi asset funds are suitable for many situations but each person will have their own investment timespan and volatility tollerence. If investing for only 5 years it's tricky as there is a material possibility of a loss at the end.

Alex

johnD17

thanks Alex (used up my post thanks!)

reading another thread on here, naively, I was unaware of the platform charge from HL for the SIPP 0.45%. This is on top of the fund fees.

I rang up HL to ask for the best method for my scenario -

Current SIPP with c. £2k in HL balanced fund.

Desire to move out into one of the above funds and add extra circa £5k.

The guy advised me to trade and then buy again online, but also advised of the dealing fees (Which I have now seen).

The main piece that needs clearing up is the definition of a FUND.

So - i currently have a FUND, but have a desire to sell this, and invest in a MULTI ASSET fund(>???). Fund dealing is free, but share dealing has charges. Is this correct? Taking Vanguard as an example, this is a colletion of shares and bonds, so is this a fund? therefore no dealing charge?

Current fund just dropped by a tenner today so might wait on trading (yes i know it will all ebb and flow)

http://www.hl.co.uk/pensions/sipp/charges-and-interest-rates

johnD17

so guys, looks like the market has 'taken a hit' since posting - as my pension fund (in both vanguard & HL Multi manager) - my play with £100 in asia is the only thing in the black.

I have a considering sum of dads inheritance that I was 'waiting' until March to 1)understand the options and 2) see market health with the political landscape, to invest to get the most of tax year allocations.

thoughts/advice?

thanks

dunstonh

Markets are down a minor blip. If you see this as anything other than that then you are probably looking at investing above your risk profile.

BLB53

One question I have is how can/can you change the funds through the life of investment i.e. start riskier and go low risk towards retirement.

Use Vanguard Target Retirement fund where the level of equities reduces automatically as you get closer to your selected retirement date.

AnotherJoe

johnD17 wrote: »

so guys, looks like the market has 'taken a hit' since posting - as my pension fund (in both vanguard & HL Multi manager) - my play with £100 in asia is the only thing in the black.

I have a considering sum of dads inheritance that I was 'waiting' until March to 1)understand the options and 2) see market health with the political landscape, to invest to get the most of tax year allocations.

thoughts/advice?

thanks

Over the timescale you are looking at investing these drops hardly even count as blips.
At some point you will see 30 & 40% losses. If you are worried about what is pretty much noise in terms of fluctuations you need to dial the risk down to much more conservative funds bearing in mind over 30 years of your investing before retirement you will also see many more 10 & 20% gain years which will overall gain you much more. Its hard to take on board but drops at the moment are your friends, you want the market to be down because every time you buy you want to buy cheap units. There's thirty years for them to grow.

Dont think its just you, immediately after Brexit there were some huge drops and some fund managers panicked and sold up big time, despite the fact they should have known better. Since then those drops have been far more than compensated for. If you bought just after the drops you'd be much better off than waiting for say a year, thinking "its all on the up now so I"ll buy now".

So, either learn to hold your nerve, or buy more conservative funds which over the time you have will give you much lower gains but perhaps fewer sleepless nights as well.

johnD17

thanks guys - I'm relatively OK with my pension investments, but like to know more about variation in funds for maybe shorter term vs longer term (dads inheritance investment for my mum vs long term pension for me); and whether you guys would recommend similar funds.


The funds aren't as simple as X is riskier, appropriate for pensions vs. X is more conservative for the shorter term.


The funds above that I've chosen are conservative, my dilemma is what I do with c. £90k of my dads money that my mum may well need in the future, taking into account potentially losses vs. zero gains of it sitting in a current account (with premium bonds allocation full).