Standard Life vs National Grid Shares

grey_gym_sock

aj23 wrote: »

Thanks for the links. Someone said about that HL doesn't charge for trading funds, but that link says you do.

HL don't charge for buying or selling funds, but do charge for holding them, at the rate of 0.45% per year (of the current value of your holding in funds).

that means that, if you put £430 in a fund, HL would be charging you just under £2 per year to hold it. (actually, they would charge 1/12 of that each month.)

that works out much cheaper than buying a share, and paying HL £11.95 to buy it. (and they might also charge you to hold a share, too - that depends what kind of account it's in.)

there are other advantages to buying a fund rather than a share. your money is spread across a large number of different shares, spreading your bets about which share will do well. and this can be done with very little cost, because your money is being pooled with many other investors' money.

HL are not the cheapest for buying funds. e.g. charles stanley direct or cavendish online would only charge 0.25% for holding a fund, compared to HL's 0.45% . which doesn't make a huge difference, if you're only paying about £2 a year, but would start to make a bigger difference if you eventually invest bigger sums.

there are also other providers who do charge for buying and selling funds, either instead of charging for holding funds, or as well as charging for holding them. this is a better option for people investing larger amounts - say, tens of thousands of £ - because the holding charges could come to hundreds of pounds a year for them, so it could be cheaper instead to pay a few quid when they buy or sell funds.

Do i have to have a Stocks and Shares ISA for dealing and trading funds?

no, it can be in an ISA or not. but you might as well put it an an ISA if you can (i.e. if you haven't used your full ISA allowance elsewhere). an ISA may save you tax, and even if it doesn't it saves you having to think about whether you owe any tax.

aj23_2

grey_gym_sock wrote: »

HL don't charge for buying or selling funds, but do charge for holding them, at the rate of 0.45% per year (of the current value of your holding in funds).

that means that, if you put £430 in a fund, HL would be charging you just under £2 per year to hold it. (actually, they would charge 1/12 of that each month.)

that works out much cheaper than buying a share, and paying HL £11.95 to buy it. (and they might also charge you to hold a share, too - that depends what kind of account it's in.)

there are other advantages to buying a fund rather than a share. your money is spread across a large number of different shares, spreading your bets about which share will do well. and this can be done with very little cost, because your money is being pooled with many other investors' money.

HL are not the cheapest for buying funds. e.g. charles stanley direct or cavendish online would only charge 0.25% for holding a fund, compared to HL's 0.45% . which doesn't make a huge difference, if you're only paying about £2 a year, but would start to make a bigger difference if you eventually invest bigger sums.

there are also other providers who do charge for buying and selling funds, either instead of charging for holding funds, or as well as charging for holding them. this is a better option for people investing larger amounts - say, tens of thousands of £ - because the holding charges could come to hundreds of pounds a year for them, so it could be cheaper instead to pay a few quid when they buy or sell funds.

no, it can be in an ISA or not. but you might as well put it an an ISA if you can (i.e. if you haven't used your full ISA allowance elsewhere). an ISA may save you tax, and even if it doesn't it saves you having to think about whether you owe any tax.

Thanks.

I've withdrawn my cash out of HL for the time being to look into researching funds.

My private pension is investing in a four way split in Standard Life funds, but obviously they do that for me.

bowlhead99

aj23 wrote: »

My private pension is investing in a four way split in Standard Life funds, but obviously they do that for me.

It's not "obviously" that they do that for you, in terms of selecting what is best for you with your overall current mix of cash, Investments, pensions and retirement plans.

When you first set up a pension (either through your workplace or a financial advisor or direct with the company) your money will often go into some standard default fund, or mix of funds, that does a reasonable job of growing your money over the long term and isn't something that you'd later complain about as being totally inappropriate.

However, presumably that four way split is something you can change to an other-ways split between a variety of available funds. If you know nothing about investment funds and asset allocation you might well choose to leave it how it is, being quite understandably fearful that if you change the mix you might worsen the returns. Which is the situation in which millions of other people with workplace or private personal pensions find themselves too.

Meanwhile I and lots of other people on this forum have looked through the available options in our own personal pensions or work pensions and changed the fund mix from whatever we were originally given, to something we prefer.

Just wanted to highlight that it's not always obvious to any of us reading that someone's pension is just going to be allocated the way the pension company decides for itself, rather than the way the person whose pension it is, has decided. For many here, we decide for ourselves. You're right that the 4 SL funds in your pension, are each a type of fund. So you're investing in funds for your retirement even if you haven't previously considered yourself to be much of a "funds investor" or felt that you needed to take an interest.

aj23_2

bowlhead99 wrote: »

It's not "obviously" that they do that for you, in terms of selecting what is best for you with your overall current mix of cash, Investments, pensions and retirement plans.

When you first set up a pension (either through your workplace or a financial advisor or direct with the company) your money will often go into some standard default fund, or mix of funds, that does a reasonable job of growing your money over the long term and isn't something that you'd later complain about as being totally inappropriate.

However, presumably that four way split is something you can change to an other-ways split between a variety of available funds. If you know nothing about investment funds and asset allocation you might well choose to leave it how it is, being quite understandably fearful that if you change the mix you might worsen the returns. Which is the situation in which millions of other people with workplace or private personal pensions find themselves too.

Meanwhile I and lots of other people on this forum have looked through the available options in our own personal pensions or work pensions and changed the fund mix from whatever we were originally given, to something we prefer.

Just wanted to highlight that it's not always obvious to any of us reading that someone's pension is just going to be allocated the way the pension company decides for itself, rather than the way the person whose pension it is, has decided. For many here, we decide for ourselves. You're right that the 4 SL funds in your pension, are each a type of fund. So you're investing in funds for your retirement even if you haven't previously considered yourself to be much of a "funds investor" or felt that you needed to take an interest.

Well I selected the four funds, but what I mean that obviously I don't manage it. It's a pension, I can't touch it until 2057 lol. It's a personal pension.

If I wanted to sell them and buy in others, or change the way it's split, then I can. I can see the growth on each fund and how it is performing.

greendoor665

And how did you select those 4 funds?

aj23_2

greendoor665 wrote: »

And how did you select those 4 funds?

In the application.

bowlhead99

aj23 wrote: »

bowlhead99 wrote:

Just wanted to highlight that it's not always obvious to any of us reading that someone's pension is just going to be allocated the way the pension company decides for itself, rather than the way the person whose pension it is, has decided. For many here, we decide for ourselves.

You're right that the 4 SL funds in your pension, are each a type of fund. So you're investing in funds for your retirement even if you haven't previously considered yourself to be much of a "funds investor" or felt that you needed to take an interest.

Well I selected the four funds, but what I mean that obviously I don't manage it. It's a pension, I can't touch it until 2057 lol. It's a personal pension.

If I wanted to sell them and buy in others, or change the way it's split, then I can. I can see the growth on each fund and how it is performing.

So, you selected the four funds initially, can monitor the performance of the funds individually and in total, and can at any point choose to sell all or part of any of the funds and buy in other funds in replacement, with the overall goal of delivering a suitable amount of money for yourself at retirement...

But 'obviously I don't manage it' ? How does that follow?

To me, it sounds like 'obviously' you actually have complete responsibility for managing it - as you are the one who decides what funds your retirement pot holds from a wide range of options, and in what proportions they should be held, and if one of the funds produces a relatively large gain or a relatively smaller gain from time to time such that the proportions of the four funds change from where they started, it is your job to rebalance them back to your target allocation.

So you have complete responsibility for managing it - so, 'obviously I don't manage it, lol' seems a funny /shortsighted answer

It's not obvious that you would choose not to manage it. The responsibility you have for making sure you have enough money in the pot to pay for your ocean cruise or walking frame in 2060 or beyond, is all yours. Just because you can't take the money out and spend it tomorrow, doesn't mean you wouldn't choose to take an interest in how it is invested.

Within your overall wealth you might have savings, property, a car, S&S investments inside or outside an ISA, and pensions (workplace or personal / private). That entire amount of wealth plus the new money coming in from your salary or businesses or welfare benefits or whatever, is what you have to live on until you're 100+ or however long you end up living. Your wealth manager is you. Some of it you won't withdraw to spend until you are a certain age, but unless you employ someone to look after it, it's still your responsibility to look after each component of your wealth.

So, if you go around with the attitude of 'I don't know what funds are or what they do, or why I would choose one over the other, or how to make a portfolio that gives me a decent overall level of long term growth, what sort of funds I should use or in what proportions', that doesn't really stack up with the fact that you are investing for retirement inside a pension with four funds that you chose.

A lot of people tend to think of pension 'as something for when I'm old' and just throw money at it every so often by monthly standing order or direct debit or whenever they have spare cash. As they can't touch it, they don't take much of an interest. But then they get all excited about what they should do with the money that they want to spendbefore retirement in two or ten or twenty years, - should they buy SL shares or NG shares or some other shares or investment funds, and if investment funds, what type of things should the investment funds hold?

There's a logic failure there somewhere because the money in your pension to spend when you're age 60 to 100 is at least as important as the money you want in ten years that you thought might be best to go in National Grid and you'll now consider investing in funds. But people are surprised when they are asked about what sort of investments are in the pension that they have the responsibility of managing. They say things like "oh it's just four funds I picked, I could monitor or change them, but I don't, because I can't spend the money yet so it doesn't really matter"

Although you're not alone in your mindset - there are plenty of other people who don't know or care about what's in their pension from time to time - it's a strange attitude to have.

I'm not saying your pension is invested badly, or that it needs more 'hands on' management or daily or weekly or quarterly reviews or any heavy buying and selling. But the concepts of selecting a portfolio of funds and checking in on them from time to time, are the same whether the money is in an S&S ISA or a pension or not in any kind of tax wrapper at all. So it doesn't make sense to say on the one hand, you don't know about funds or how to make a portfolio, and then on the other hand, you have selected four funds in your pension and you are happy that they are a good mix which will stand you in good stead for the next few decades.

aj23 wrote: »

greendoor665 wrote: »

And how did you select those 4 funds?

In the application.

I laughed a little when I read your answer, as it's like if you're out at a restaurant and someone says "how did you find the chicken tikka masala tonight?" and you reply "oh it was easy, I just looked in the balti dish and found it in there". They are weren't literally asking how you were able to find it, but expecting an answer along the lines of "oh it was good thanks, could have done with a bit more spice though" or maybe "hmm, chicken was a bit tough, I won't order that again"...


Greendoor is picking up on the point that you said you don't know about funds but you have somehow selected some funds for your pension, and wonders how you came to choose those funds.

The answer they were expecting to the question is not:

"how did you select those funds?" "oh I moved my mouse to the icon for the fund and pressed 'select this fund' and repeated it with the three other ones, and then I had selected four funds"

it's more like:

"how did you select those funds?" "oh well, these are the decisions (a, b, c) that I made to eliminate the other available funds from consideration and end up with the four that were most suitable for my needs. And I chose the ratios between them based on x,y,z"

aj23_2

bowlhead99 wrote: »

So, you selected the four funds initially, can monitor the performance of the funds individually and in total, and can at any point choose to sell all or part of any of the funds and buy in other funds in replacement, with the overall goal of delivering a suitable amount of money for yourself at retirement...

But 'obviously I don't manage it' ? How does that follow?

To me, it sounds like 'obviously' you actually have complete responsibility for managing it - as you are the one who decides what funds your retirement pot holds from a wide range of options, and in what proportions they should be held, and if one of the funds produces a relatively large gain or a relatively smaller gain from time to time such that the proportions of the four funds change from where they started, it is your job to rebalance them back to your target allocation.

So you have complete responsibility for managing it - so, 'obviously I don't manage it, lol' seems a funny /shortsighted answer

It's not obvious that you would choose not to manage it. The responsibility you have for making sure you have enough money in the pot to pay for your ocean cruise or walking frame in 2060 or beyond, is all yours. Just because you can't take the money out and spend it tomorrow, doesn't mean you wouldn't choose to take an interest in how it is invested.

Within your overall wealth you might have savings, property, a car, S&S investments inside or outside an ISA, and pensions (workplace or personal / private). That entire amount of wealth plus the new money coming in from your salary or businesses or welfare benefits or whatever, is what you have to live on until you're 100+ or however long you end up living. Your wealth manager is you. Some of it you won't withdraw to spend until you are a certain age, but unless you employ someone to look after it, it's still your responsibility to look after each component of your wealth.

So, if you go around with the attitude of 'I don't know what funds are or what they do, or why I would choose one over the other, or how to make a portfolio that gives me a decent overall level of long term growth, what sort of funds I should use or in what proportions', that doesn't really stack up with the fact that you are investing for retirement inside a pension with four funds that you chose.

A lot of people tend to think of pension 'as something for when I'm old' and just throw money at it every so often by monthly standing order or direct debit or whenever they have spare cash. As they can't touch it, they don't take much of an interest. But then they get all excited about what they should do with the money that they want to spendbefore retirement in two or ten or twenty years, - should they buy SL shares or NG shares or some other shares or investment funds, and if investment funds, what type of things should the investment funds hold?

There's a logic failure there somewhere because the money in your pension to spend when you're age 60 to 100 is at least as important as the money you want in ten years that you thought might be best to go in National Grid and you'll now consider investing in funds. But people are surprised when they are asked about what sort of investments are in the pension that they have the responsibility of managing. They say things like "oh it's just four funds I picked, I could monitor or change them, but I don't, because I can't spend the money yet so it doesn't really matter"

Although you're not alone in your mindset - there are plenty of other people who don't know or care about what's in their pension from time to time - it's a strange attitude to have.

I'm not saying your pension is invested badly, or that it needs more 'hands on' management or daily or weekly or quarterly reviews or any heavy buying and selling. But the concepts of selecting a portfolio of funds and checking in on them from time to time, are the same whether the money is in an S&S ISA or a pension or not in any kind of tax wrapper at all. So it doesn't make sense to say on the one hand, you don't know about funds or how to make a portfolio, and then on the other hand, you have selected four funds in your pension and you are happy that they are a good mix which will stand you in good stead for the next few decades.



I laughed a little when I read your answer, as it's like if you're out at a restaurant and someone says "how did you find the chicken tikka masala tonight?" and you reply "oh it was easy, I just looked in the balti dish and found it in there". They are weren't literally asking how you were able to find it, but expecting an answer along the lines of "oh it was good thanks, could have done with a bit more spice though" or maybe "hmm, chicken was a bit tough, I won't order that again"...


Greendoor is picking up on the point that you said you don't know about funds but you have somehow selected some funds for your pension, and wonders how you came to choose those funds.

The answer they were expecting to the question is not:

"how did you select those funds?" "oh I moved my mouse to the icon for the fund and pressed 'select this fund' and repeated it with the three other ones, and then I had selected four funds"

it's more like:

"how did you select those funds?" "oh well, these are the decisions (a, b, c) that I made to eliminate the other available funds from consideration and end up with the four that were most suitable for my needs. And I chose the ratios between them based on x,y,z"

I think you're taking what I said a bit too literally here. When I said obviously they manage it, that is what I meant to a degree. I opened the pension, I chose the funds, I deposit to it monthly. That's it. I get a statement once a year, log in every once in a well to check out the growth. They do the rest. I'm not paying a platform charges to do anything on my behalf etc. I think you're getting a bit too caught up on my use of 'obviously' which isn't really the main point here. I haven't ever viewed a pension as a 'something when I'm old,' I opened it because I want to ensure I have security for later in life. It's not something where I've locked it away and thrown the key.

I understood what Greendoor was saying. My one line sentence of humour again is being put under a looking glass unnecessarily here. I've mimicked what Dad's pension funds, he helped me do it. Clearly did something right as his has been get £40k year on year investment growth for the past few years in particular and mine despite only depositing for three and a half years is yielding 9% investment growth.

bowlhead99

aj23 wrote: »

I think you're taking what I said a bit too literally here. When I said obviously they manage it, that is what I meant to a degree. I opened the pension, I chose the funds, I deposit to it monthly. That's it. I get a statement once a year, log in every once in a well to check out the growth. They do the rest.

Sure, I understand where you're coming from. Basically you have a portfolio of funds that you selected and don't ever do anything with, other than add to each month. So it is a self-selected and self-managed portfolio (ie, nobody is going to choose or change your mix of funds other than yourself) but your style of management is very "hands-off".

The management that they do (the fund manager) is focused on managing the assets in each fund individually against its own objectives, not on the whole overall balance of the portfolio. If you had chosen four funds at 25%, 25%, 25% and 25% and over time they inevitably grow at different speeds so that you're left with 34%, 16%, 21%, 29%, it would be your problem rather than the pension manager's problem.

So you can choose to just log in and look at the portfolio once in a while and note the growth (or loss), or you can choose to log in and look at the portfolio and make changes if it's out of whack with your overall intention. The same logic would apply to funds held in an ISA.

I think you're getting a bit too caught up on my use of 'obviously' which isn't really the main point here. I haven't ever viewed a pension as a 'something when I'm old,' I opened it because I want to ensure I have security for later in life. It's not something where I've locked it away and thrown the key.

OK, you are not ignoring it, you are taking seriously your responsibility to invest for the future.

But *my* main point was, if you're not ignoring it and haven't thrown away the key and are taking an active interest in the performance of the funds you hold and the mix of them that you have in your pension, then that's pretty similar to what you would do with a funds ISA so it will be easy to translate the concepts from one area (pension) to another (investment outside a pension).

Whereas, if you're not taking an interest in that 'funds inside the pension' stuff, it will be harder to get your head around investing in funds outside the pension, but it highlights that perhaps you should take more of an interest because the portfolio of pension funds are, after all, self-selected and self-managed. (Although, the individual funds are managed by the company, but the selection and ongoing mix of them is not).

I understood what Greendoor was saying. My one line sentence of humour again is being put under a looking glass unnecessarily here.

That's the problem with written stuff on the internet, it's hard to know when someone is intending to be funny or sarcastic or friendly or deliberately antagonistic

I've mimicked what Dad's pension funds, he helped me do it. Clearly did something right as his has been get £40k year on year investment growth for the past few years in particular and mine despite only depositing for three and a half years is yielding 9% investment growth.

Copying a system that is working ok for one person can be an ok place to start for another person. Similarly, the sort of mix of fund types you're using in your pension could be an ok place to start for your non-pension investments.

Although, the obvious points to make are:

- your Dad is probably 30 years closer to using the money than you are, which might imply some funds would be more suitable for him than for you and vice versa;

- £40k growth every year sounds very nice indeed, but of course it depends on whether that's being achieved on £200k or £1million

- likewise, 9% growth for the last few years is decent, though obviously markets have been going up pretty strongly for most of the time since the last crash bottomed out about 9 years ago, so you would expect some big negative periods in due course ; that's when it'll be important to be happy and confident in your fund selections.

Not intended as a criticism just some points to think on. Good luck with your choices.

aj23_2

bowlhead99 wrote: »

Sure, I understand where you're coming from. Basically you have a portfolio of funds that you selected and don't ever do anything with, other than add to each month. So it is a self-selected and self-managed portfolio (ie, nobody is going to choose or change your mix of funds other than yourself) but your style of management is very "hands-off".

The management that they do (the fund manager) is focused on managing the assets in each fund individually against its own objectives, not on the whole overall balance of the portfolio. If you had chosen four funds at 25%, 25%, 25% and 25% and over time they inevitably grow at different speeds so that you're left with 34%, 16%, 21%, 29%, it would be your problem rather than the pension manager's problem.

So you can choose to just log in and look at the portfolio once in a while and note the growth (or loss), or you can choose to log in and look at the portfolio and make changes if it's out of whack with your overall intention. The same logic would apply to funds held in an ISA.

OK, you are not ignoring it, you are taking seriously your responsibility to invest for the future.

But *my* main point was, if you're not ignoring it and haven't thrown away the key and are taking an active interest in the performance of the funds you hold and the mix of them that you have in your pension, then that's pretty similar to what you would do with a funds ISA so it will be easy to translate the concepts from one area (pension) to another (investment outside a pension).

Whereas, if you're not taking an interest in that 'funds inside the pension' stuff, it will be harder to get your head around investing in funds outside the pension, but it highlights that perhaps you should take more of an interest because the portfolio of pension funds are, after all, self-selected and self-managed. (Although, the individual funds are managed by the company, but the selection and ongoing mix of them is not).

That's the problem with written stuff on the internet, it's hard to know when someone is intending to be funny or sarcastic or friendly or deliberately antagonistic

Copying a system that is working ok for one person can be an ok place to start for another person. Similarly, the sort of mix of fund types you're using in your pension could be an ok place to start for your non-pension investments.

Although, the obvious points to make are:

- your Dad is probably 30 years closer to using the money than you are, which might imply some funds would be more suitable for him than for you and vice versa;

- £40k growth every year sounds very nice indeed, but of course it depends on whether that's being achieved on £200k or £1million

- likewise, 9% growth for the last few years is decent, though obviously markets have been going up pretty strongly for most of the time since the last crash bottomed out about 9 years ago, so you would expect some big negative periods in due course ; that's when it'll be important to be happy and confident in your fund selections.

Not intended as a criticism just some points to think on. Good luck with your choices.

Yeah, I mean each of the funds are growing in percentage points so it looks like it's doing well. Investment Growth overall is good. I've been more concentrated in savings but now looking more into shares and funds and taking more interest in how my pension is working.

Actually my Dad could have taken his 25% tax-free lump 6 years ago, so he's not as young as you think Lol, yes, but I'm not going to disclose the total of his pension.

Thanks for your comments.