Is this a good pension fund?

dunstonh

The points about the Aegon fund above being too conservative, not sufficiently diversified, and 1% fee being excessive make sense to me.

Does it really have a 1% charge?

1% may be the default charge but it doesnt mean it is the actual charge. Fund based discounts, adviser/employer discounts etc bring it down from the default. It is rare to have any new business arranged on default nowadays.

I did an Aegon fund the other day at 0.05%. A fund that is available on older Aegon products at 1.0%. You should never rely on the fund factsheet to determine YOUR charges.

lynxthecat

6% contributions + everything above 100k would seem to satisfy annual and life allowances, ending up with the £1m at retirement. The issue I face is whether 30 years investing into the Aegon fund is a good idea vs say tracker-based SIPP.

Taking into account the suggestion I received then, how might the performance compare to a SIPP based primarily on (a) tracker(s) such as the Vanguad FTSE All-World?

I do like the idea of low-fees and being in control and my understanding is that the majority of pension funds do not outperform simple tracker-based arrangements.

dunstonh

6% contributions + everything above 100k would seem to satisfy annual and life allowances, ending up with the £1m at retirement. The issue I face is whether 30 years investing into the Aegon fund is a good idea vs say tracker-based SIPP.

if you build a portfolio of trackers, then you need to control the asset allocation and the rebalancing. If you go with a multi-asset fund then that is handled within a fund. However, having £1m in a multi-asset fund is very unusual.

If you use a SIPP, you will miss out on employer contributions and you will have the SIPP charges in addition to the fund charges.

lynxthecat

I work for a small firm and I am optimistic at present about 6% going where I want it, but I may be wrong. Going to check that tomorrow.

dunstonh

Nothing beats free money.

bowlhead99

As you have mentioned you expect to hit the lifetime cap (it may grow in size or get abolished altogether at some point, but not a huge stretch to assume someone earning six figures and happy to make large contributions will eventually max out their available pension relief under whatever measure is in place over the next few decades) then the other obvious place to look at in addition to pensions is S&S Lifetime ISA.

I assuming you're eligible for one as you talk about contributing to pension for another 30 years implying you're under 40 at the moment. So LISA is available and with your earnings it should be relatively trivial to max out your £4k annual allowance each year until age 50, which gives a bonus which is inferior to the higher rate pension relief but can be drawn flexibly in retirement without worrying about tax brackets.

lynxthecat

Terrific thanks bowlhead99. Firm is happy for me to divert the contributions and salary sacrifice where I want, so I can use combination of Aegon and/or SIPP (and potentially ISA then too). I will check with Aegon concerning the fund options they give - perhaps I can adopt a higher risk fund in the short term.