Pension advice please

Stevieboy36

Just looking for a bit of advice regarding my pensions and the funds that many of them are being invested in. I’m 51 and the wife is 49 and I hope to retire around 60-62 age if financially possible.
Current situation: Me
3 x DC pensions (one Deferred) with the following investments

1st DC PensionL&G - 70,000 (75% in UK Smaller Companies and 25% in US Equity index). Smaller Companies has been a good investment over the last few years, but is obviously taking a big downturn recently. I’m still paying £200 a month into this one.

2nd DC Pension Deferred – 58000 (30% in L&G Global Equity Weights 30:70, Diversity Growth Fund 65% and L&G ovr5Yr ILGilts index fund 5%)

3rd DC Pension – Standard Life Active Plus 111 - just started with Company so only £1000 – Paying £450 monthly includes 10% company 6% me)

1x DB pension deferred (last time I checked it will pay circa £4000 a year from 65)
Full State Pension

Wife:
NHS Pension (works part time and will have 23 years service when she reaches 60) – estimate is for a pension of around £4000 a year, but this may change depending on her job role etc
Full State Pension again
Savings Roughly £10,000 in ISA

Mortgage – roughly £90000 left and on course to pay this by the time I’m 60.

Realise I do need to ramp up savings/Pension contributions, but worked out we could live on around 14000 a year.
Plan is to retire before the wife and live of her wages for few years (and possibly use a small amount of my DC pension per month) before she retires.

Any recommendations would be gratefully received.

AnotherJoe

The first pension seems to me to be a very "unusual" choice of funds. Very niche. Who chose that? If it was me I'd move it all into a low cost global tracker rather than 75% focused in such a specific area as UK smaller cos, especially since that is exactly the sector that may get hammered by a bad Brexit.

Stevieboy36

Thanks for the reply. The Smaller Companies fund was initially the only one that was in the scheme some 13 years ago (it was chosen by the Company I worked for). I changed it to add the US Equity one as well, but do realise I do need diversify a bit with Brexit). Cheers

ams25

Does your 14,000 allow for a comfortable retirement...?
Have you fully considered hobbies, travel, increased leisure time and spending, plus capital purchases such as replacement car, home repairs etc and other expenses such as dental etc. 14k seems pretty tight for a couple to me.... Maybe some of the dc pension can be reserved for the major expenses. I'd build a cash flow spreadsheet covering regular expenditure and likely major items to give you more confidence in the 14k figure...and revise it if needed.

The other aspect to consider is how the survivor will cope on one state pension and fs. Your income will drop from a maybe comfortable c.25k to c.14k. (Assuming 50% widow/er pension on the fs). If you've spent the dc pots then it could be tight.

As you say you need to ramp up savings.... If you use the next 9 or so years wisely then you'd be making your retirement more comfortable.

Stevieboy36

Thanks. The 14000 does include an amount for holidays, but I think we would need either some of the DC pension or additional savings, to cover any unexpected costs.

Albermarle

In an ideal world you need to increase pension contributions , pay off the mortgage quicker and have more cash savings ! However of the three I would personally prioritise the last one. Two reasons for this :
1) Emergency funds in case you lost your job/had a very unexpected large bill for something
2) When in retirement , it is better to be able to use cash funds rather than drawing on pension funds after there has been a market downturn

A simpler action in the short term would be to check the charges on the DC pensions ( pension charge + fund charge , although sometimes in workplace pensions they are combined as one charge ) .Sometimes it is not obvious and you may have to contact each provider for the info. If one has higher charges than another you could transfer it . Sometimes you get a discount if your pot is bigger as well.