Help with my work based Aviva pension

henryandmay

Hi

I have my work based pension with AVIVA and it’s all invested in Aviva Mixed Investment 20-60% Shares S6 Pension Fund.

I have no idea how or why I am in this fund nor was I ever asked if I wanted to be. I was just plonked in it when I started working at my current company 8 years ago.

Is this a ok fund to be invested in? I have about 18k invested to date and I am 35. I have recently up my total pension contribution to 15 %


Any help much appreciated.

dunstonh

I have no idea how or why I am in this fund nor was I ever asked if I wanted to be. I was just plonked in it when I started working at my current company 8 years ago.

When you join you are asked what inveestment fund(s) you wish to select. if you do not select any , you are placed in the default.

As the average UK consumer is cautious and has a low capacity for loss, a 20-60% equity fund is the logical default fund.

Is this a ok fund to be invested in?

Might be if it is suitable for your objectives, knowledge, understanding and behaviour. Might not be though.

Bimbly

I also have an Aviva works pension. It is a very large company and has different schemes for different employers, but here's what you might like to do.

Get out your scheme bookets and documents, or go online to get them from your scheme (ie, log on), or ring them and say you want to consider your investment choices and can they send you all the booklets/documents.

Have a look at the default investments that are available to you. Often, you will have a choice, not just the one you're in. They may be called "Adventurous" or "Socially Supportive" or "Aspiring lifetime". Read everything and have a think about which one of these might be suitable for you.

The other way would be to manage the investments yourself. Aviva, on many plans, allow you to come out of the default investment option. You can then invest in a select group of funds instead. These are a mix of equities (shares), bonds, maybe a few things like property, and also mixed asset funds (equities and bonds). This option is a lot more complicated.

If you go for the choose your own investments option, you will need to understand what you're doing and also take a look at least once a year to re-balance the funds. That's great if you love this stuff and truly understand that investments can go down as well as up. You could look one year, for example, and see the value has fallen and then worry that you did the wrong thing. You could even panic and change your investments and end up making things worse. What sort of person are you?

If you want to learn more, I enjoyed reading Tim Hale's Smart Investing book. DIY Pensions by John Edwards is worth a look. There's also a great deal of information on the Monevator website which is definitely worth a look.

If you are with a large employer who offers job benefits, see if they offer an advice service on finance/pensions. If you have a lot of money, you could consider talking to an independent financial advisor (although not worth it for most).

My personal view is that most people are best sticking with one of the default options as this is the best way to contribute and forget. Pension funds can build up a huge amount of money and letting someone else worry about it is the easiest thing. Read your pension statement every year, check you are on track and forget about it again.

The most important bit you should do is look at how much money you are putting in. Are you putting in enough to allow you to retire on the money you will need at the age you want? Definitely max out employer contributions.