Is this a good pension fund?

AnotherJoe

lynxthecat wrote: »

Next step for me then I suppose is to find out from my present employer whether I can select a different Aegon fund, or even an entirely different product.

Most likely the fund you mentioned was chosen because its the dull standard no need to make hard decisions cant be sued by employees for choosing something risky, easy choice for a default selection. Its been chosen to be in their interests, rather than yours.

Pun

Get some personal advice - you are missing all sorts of nuances. If your earnings are as high as you claim, why do you think free 'advice' is the way to go?

lynxthecat

Thanks for the comments. I suppose I lack confidence in employing an IFA; I imagine the average IFA would recommend a pension fund such as the Aegon fund mentioned above. In any case, I value comments from individuals sufficiently enthusiastic to post responses to questions like mine on a forum dedicated to savings and investments!

@AnotherJoe, @Linton and others, can you give me (a) specific pension fund example(s) (Aegon or otherwise) that you would recommend?

AnotherJoe

No, because I dont know enough about you, your risk levels, your attitude towards managing funds*, and in any case it would be academic since I might spend half an hour looking at funds and suggest one or five and then you'll say that your pension doesn't provide that one, or just three of the five. And i know nothing at all about Aegon funds so I'd need to check them out.

It also would be good education for you to do the research, even if you do pay for some "start up" advice** (which is the advice I'd give you) its handy to understand the fundamentals in the same way that if you go to a garage are told told the clutch needs replacing, you at least have a vague idea if thats a reasonable suggestion or not. Also with your salary their are various different tax levels that may come into play and understanding those could be important.


* buy one and keep for the foreseeable but perhaps swap occasionally, or half a dozen and rebalance between them annually, for example.

** eg doesn't need to be ongoing. Does your work not provide anything in teh area of pensions advice via any services? ONly issue Ive found with advice really is that they tend to be more conservative probably mostly from a CYA perspective.

DairyQueen

No intention to patronise but it will be obvious to the experts here that you are not (yet) sufficiently well-informed to make the most basic of investment decisions. I very much doubt that the short-cut you seek will be available on this forum as nobody with any integrity will suggest funds given the lack of information about your situation and, especially, given that you would be accepting those suggestions 'blind'.

This is not a basic investment decision. This is one of the most important investments you will ever make. It's your money and you need to make some effort to protect it. There are no short-cuts to this process.

If you don't wish to invest sufficient time to understand the detailed pension and tax rules that apply to your situation (and which could save/cost you tens of thousands) then you need to pay someone else to do so. That payment will be a mere drop in your pension ocean.

At the moment your ignorance leaves you vulnerable to making dumb decisions. Before you do anything else spend a little time educating yourself on just the basics: employer's scheme/contributions, tax rules, pension rules, types of pension, etc. Understanding this will help you (at the least) to select and communicate with an IFA, and also give you a reasonable perspective on the quality of advice given by blokes-down-the-pub.

Then you have two choices:

1) Shortlist a few IFA pension specialists. Pick one with whom you feel comfortable. Pay the fee and take their advice.

2) Spend several months educating yourself on investment, tax and pension principles and then take the DIY route.

Experts here are usually willing to offer opinions on the advice you are given, or on the investment choices you propose.

Caveat emptor always applies.

Would you (as a first-time buyer) consider purchasing a £1 million pound house with a 30-year-mortgage, sight-unseen, and without the support of a solicitor or surveyor?

Thought not.

Do the smart thing: educate yourself on the basics and then call-in the experts. You will go a very, very long way (outside of this country?) to find an IFA who would give worse advice than the suggestions you have currently made.

maximumgardener

Dairy Queen is spot on!

you (OP) should do the legwork and see say 3 IFA's and choose one to work with.

Take your time ...its not a race!!!!

dunstonh

Someone suggested creating a self-managed ISA pension based on a FTSE tracker.

1 - no such thing exists.
2 - single sector investing is awful investing.

Dont take any advice from someone that doesnt know what they are talking about.

lynxthecat

Thanks again @AnotherJoe. Any specific books or other sources of information you would recommend?

Comments on pension fund selection are helpful, with the overall picture of around £1m to be invested over 30 years, and me not being particularly risk averse.

The points about the Aegon fund above being too conservative, not sufficiently diversified, and 1% fee being excessive make sense to me. So these are factors I will look into further.

Otherwise any advice about pension funds in general is appreciated. For example: are there providers that should be avoided or could be recommended? Are there ranking systems or otherwise ways of assessing providers and/or funds? What sort of characteristics should be looked out for? Any things to avoid? What sort of fees are to be expected for typical pension funds?

AnotherJoe

A good place to start would be the monevator website.

Tcquins

Not that it is enormously relevant, but that Aegon pension fund wont have an AMC of 1%. Its the base amc they have on the factsheet.

As it is your work autoenrolment scheme, the amc for the default fund is capped at 0.75%, however, it may well be far lower than this.

Depending on the avenue you go down, funds advisers use will generally be more expensive than your auto enrolment scheme, but given your earnings, and the possible interactions with the tapered annual allowance etc. The advice will more than pay for itself over the long term.