Advice over lump sum into pension

2stixoftwix

I have my own company and we have had a successful year.
It is looking like I will be able to take 40k out of it and put directly into my personal pension.

The pension I have at the moment is a very old with profits Legal and general pension that I took out in the late 90's and has about £90k in it.

It is possible that this fund will be sold to Reassure.

I was interested in investing in the new Vanguard pension, but it still hasn't been launched

I find the whole pension sipp confusing so I am looking for something easy to understand as I don't have the time (or knowledge) to play with portfolios.

I was looking to temporarily stick it into a nutmeg type pension, and then move it when Vanguard gets launched, but I'm still unsure

So my options are
1) put the £40k into Legal and general
2) Use a robo type pension
3) Other - but what

Any advice - I know the stock market isn't great at the moment, but I just don't know what to do.
I am female and 48

Any advice gratefully received

kidmugsy

There are non-mass market SIPPs that will allow you to put the pension money into such things as (i) savings accounts with non-absurd interest rates, (ii) ns&i, (iii) gold bullion e.g. at the Royal Mint.

If you have a decent chance of contributing £40k most years perhaps you should pay an IFA for advice. Emphasis on the "I".

LHW99

If you are thinking 1-2 years, you could consider HL. If it stays in cash, you won't pay fees, or if its only going to be one £40,000 you could put it into a single fund and transfer wouldn't be too horrendous. You don't get charged a closure fee I believe if you have it open more than 1 year. HL also has a pretty easy website if you are new to it.

Albermarle

Any advice - I know the stock market isn't great at the moment, but I just don't know what to do.

In reality nobody knows what direction the stock market will take in the short term . In the medium term it will go up and down but over a long term period( over 10 years ) , history tells us it will go up above inflation.
The usual advice is not to invest large lump sums all in one go but spread them out a bit . That avoids the scenario where you invest £40K and the next day the market drops 25%

Regarding changing your pension there is a whole lot of providers . Not just Sipps but also traditional household names offering personal pensions , like Aviva & Standard Life who offer simple to understand options
In fact for an investor like yourself there is very little practical difference between a SIPP and a traditional personal pension.

Marcon

2stixoftwix wrote: »

I have my own company and we have had a successful year.
It is looking like I will be able to take 40k out of it and put directly into my personal pension.

Just checking...when you say 'take £40K out of it' you do mean that the company makes the payment, NOT you?

2stixoftwix

Yes the company will make the contribution
Hence it will be better to do it this way than the dividend route.

It will be a lump sum, as I don't know the exact amount until next month

As I said I just need somewhere to put it, short term - long term

DairyQueen

The old adage: "Time in the market not timing the market' applies. The £40k will be invested for at least 7 years ( as you cannot access until you are at least 55) and probably much longer. If you leave it in cash then it is guaranteed to devalue with inflation.

As you have neither the time nor inclination to actively manage your pension, but need to make the contribution soon, I would suggest one of two things:

a) Pay an IFA to advise and set-up. Possibly overkill for £40k.

b) Open a SIPP with (for example) HL or AJ Bell. This is likely to be the cheapest option. Which platform you choose depends on whether you intend to transfer when (if?) Vanguard opens its SIPP, and whether you therefore intend to hold in cash until such time as this becomes available. Compare total charges and transfer/closure conditions and fees to decide which is the better wrapper.

Personally, I would not tie my pension to one investment management company Also, some platforms offer discounts on VLS's competitors (e..g. HL offers Blackrock Consensus at 0.09% compared to VLS at 0.22%).

I would consider one of the following:

a) SIPP with HL and invest in Blackrock. Total charge of 0.45% + 0.09%
b) SIPP with AJ Bell and invest in Blackrock or VLS. Total charge of 0.25% + 0.22%

OH and I use both platforms and customer service has been good on both. HL, in particular, has excellent customer service and website but higher platform charge. That higher charge starts to really bite when a portfolio hits around £80k.

However, HL's charges are lower for other services. You need to look closely at the fees and charges to see how each platform fits your circumstances.

Both VLS and Consensus are good 'lock-up-and-leave' investments for those who wish to be hands-off.