Views on Royal London Governed Portfolio

JoeCrystal

SMcGill wrote: »

Hi

So, I acted on the suggestion Dunstonh made to my post a few weeks ago to look at a more modern pension than the Standard Life one I’ve left ignored for the last 15 years. I’m happy I did as it made me really think about my needs, and now the IFA I found has recommended the RL Governed Portfolio 5 as a good match for my risk profile which apparently is 5. The IFA fee is £795 (their min charge I’m told) and the RL management fee is 0.5%.

Before I go ahead, I just wanted to see whether anyone here would scream DON’T DO IT for any reason?

I used RL set up with an IFA as my personal pension with different RL Governed Portfolio fund. I am reasonably okay with it. It does do Profitshare Awards which add a little extra to the pot. They do have a management charge discount according to my paperwork at

£0 to £34k: 0.10%
£34k to £68k 0.50%
£68k to £202k 0.55%
£202k to £673k 0.60%
£673k+ 0.65%

Customer service-wise, they much prefer to work with and through advisers rather than direct. I see that you are thinking to make a single lump-sum contribution. Make sure you get a single contribution application form (or you can download it from RL adviser pages after googling it).

SMcGill

Customer service-wise, they much prefer to work with and through advisers rather than direct. I see that you are thinking to make a single lump-sum contribution. Make sure you get a single contribution application form (or you can download it from RL adviser pages after googling it

Thanks, it’s important to know that as RL doesn’t state anywhere I need an IFA to pay into or access my plan but I’ve asked my IFA to clarify a few points about costs and fees so I’ll see what he says.

.

Albermarle

I plan on making a £50k gross contribution once the pension is transferred and would welcome advice on whether it makes any difference to tax relief if I do it all in one transaction or split it across financial years. I pay 40% on around £25k of my income.

The higher rate tax relief on pension contributions should be maximised where possible . However you can not get more relief that you actually paid in a tax year So ideally you should split the £50K over two tax years.
However as you have a job/salary, then you must also be contributing to your workplace scheme , so already gaining some HRT relief. In which case you will have to split the £50K over three tax years to gain maximum benefit.

SMcGill

Thank you Albermarle!

Yes, my total DB workplace pension payments last tax year were £11k so I need to take this into account.

I’m a bit confused about the difference between pension annual allowance and pension input allowance and I’m not sure who to ask about this but I’ve started with asking the workplace pension scheme administrator for a pension statement.

If I contributed in August, can HMRC adjust my tax code for the remainder of 2019/20 or am I more likely to see this applied to next years tax code?

Potboiler

One of the Vanguard Life Strategy products is usually the answer, despite the advisor's waffle.

Albermarle

I’m a bit confused about the difference between pension annual allowance and pension input allowance and I’m not sure who to ask about this but I’ve started with asking the workplace pension scheme administrator for a pension statement.

The max anyone can contribute to a pension in one tax year is £40K . This includes your contributions + any tax relief+ employer contributions . If you have not utilised the full £40K in the previous two tax years , you can carry the unused part forward.
However you can not claim back relief on tax , if you have not earned that much tax in the tax year , regardless of the above . eg
You add £10K to your pension for the previous two tax years , so in theory you could add £100K , this tax year , but only if you earned at least £100K this tax year.
In your case you should look to at least put enough in your pension to claim all the 40% tax you will pay . If you add more you will only gain 20% tax relief on that so less beneficial.

If I contributed in August, can HMRC adjust my tax code for the remainder of 2019/20 or am I more likely to see this applied to next years tax code?

yes they can adjust your tax code if you inform them either by phone or via the website.
Be aware though they will automatically assume you will make the same contributions next tax year ,and adjust your tax code for next year accordingly .

SonOf

Potboiler wrote: »

One of the Vanguard Life Strategy products is usually the answer, despite the advisor's waffle.

So, you want the OP to pay higher charges? Maybe it's you that is talking waffle.

SMcGill

You add £10K to your pension for the previous two tax years , so in theory you could add £100K , this tax year , but only if you earned at least £100K this tax year

I’ve read about a calculation needing opening+closing amounts and involving inflation rate and a factor of 16 ... what’s this used for? Just in case it makes a difference to your answer, I have a DB pension scheme at work but the additional contributions will be to this new RL personal pension.

Albermarle

Just in case it makes a difference to your answer, I have a DB pension scheme at work

I assumed you only had DC pensions .
For DC it is easy to see how much is contributed to the pot each year.
For DB it is more complicated because there is no pot as such , you are buying entitlement to benefits and it is more complex to calculate the value . I do not have experience of how this value is calculated , maybe another poster will help.

SMcGill

Ah okay that makes sense. I’ve asked the scheme administrator for a statement so hopefully this will give me the maths needed, thanks!