Investing £150,000 for growth

Threadersroyal

Just joined the site so first post. I retire from the Fire Service in November 2019 at 52 years old. I am taking £150k from my pension lump sum and investing it for growth for at least 10 years. I have spoken to advisors from Wealth at Work and St James Place. Costs for them to manage £150k in their investment funds are - 3% Wealth at Work, 5% St James Place upfront cost and - 1.8% annual fund management fee of the value of the whole investment. Any thoughts or advice please?

msallen

Yes - avoid those people at all costs (or it will cost - dearly!).

If you're not confident of DIY-ing your investment then use a local IFA - the I for Independent being very important.

Yellow_mango

Why not leave it invested in the pension?

Linton

I assume your pension is a Fire Service Defined Benefits ("final salary") pension. Please confirm. Is the £150K the tax free lump sum or is it a transfer out of the whole pension?



If you are transfering out so why are you doing it? For most people transfering a DB pension is a bad idea. To transfer out a DB pension you must by law receive advice from a suitably qualified Independent Financial Advisor (IFA).



St James Place are extremely expensive and are not IFAs as they sell their own products so you wont get unbiased advice. You would get it much cheaper from a qualified local high street IFA.

sendu

To re-iterate what others have said, stay away from them or anyone else charging a high (or ideally any) % fee for management.

Over the long term, a successful stock market investment might only generate 4%/yr returns above inflation. Don't give anyone ~50% of that for giving you bad advice!

Your pension may already be investing your money "for growth", in which case you can just leave it there. If the pension has switched to mostly bonds or low growth vehicles designed for wealth protection, perhaps you can simply ask them to change what it is invested in back to a high % equity option?

The best investment you can make right now is to read a good book on investment, to allow yourself to understand and manage your stock market portfolio via a cheap online broker.

Threadersroyal

Linton wrote: »

I assume your pension is a Fire Service Defined Benefits ("final salary") pension. Please confirm. Is the £150K the tax free lump sum or is it a transfer out of the whole pension?

If you are transfering out so why are you doing it? For most people transfering a DB pension is a bad idea. To transfer out a DB pension you must by law receive advice from a suitably qualified Independent Financial Advisor (IFA).

St James Place are extremely expensive and are not IFAs as they sell their own products so you wont get unbiased advice. You would get it much cheaper from a qualified local high street IFA.

It is a final salary scheme. The £150k is part of a £200k tax free lump sum I am taking. £50k for celebrations and £150k to invest for my kids future.

bostonerimus

If you need an IFA then find a local company that has lower fees and will probably give you better service. Annual fees should be around 0,5%. The companies and fees you are quoting will cost you a lot of money and grief. You have been warned!!!!!

Threadersroyal

sendu wrote: »

To re-iterate what others have said, stay away from them or anyone else charging a high (or ideally any) % fee for management.

Over the long term, a successful stock market investment might only generate 4%/yr returns above inflation. Don't give anyone ~50% of that for giving you bad advice!

Your pension may already be investing your money "for growth", in which case you can just leave it there. If the pension has switched to mostly bonds or low growth vehicles designed for wealth protection, perhaps you can simply ask them to change what it is invested in back to a high % equity option?

The best investment you can make right now is to read a good book on investment, to allow yourself to understand and manage your stock market portfolio via a cheap online broker.

My pension is a public sector government scheme which gives me guaranteed index linked income for life so that part is taken care of. It's the £150k which I have decided to invest from my £200k tax free lump sum I am investing. Already I see from responses to stay away from both companies I have already spoken to.

Threadersroyal

msallen wrote: »

Yes - avoid those people at all costs (or it will cost - dearly!).

If you're not confident of DIY-ing your investment then use a local IFA - the I for Independent being very important.

I have another meeting with an IFA from Chase de Vere next month to get some advice.

Threadersroyal

Yellow_mango wrote: »

Why not leave it invested in the pension?

My options on retirement is to take a lump sum of approx £200k and monthly pension of £2100 after tax or no lump sum and a pension of about £2600 per month. It is best for me to take the lump sum and invest it with the £2100 per month pension. Hope that makes sense.

Alexland

Threadersroyal wrote: »

£50k for celebrations

Wow that's going to be an awesome party.

Threadersroyal wrote: »

I have another meeting with an IFA from Chase de Vere next month to get some advice.

You have skill in finding the expensive ones. Try searching your postcode at https://adviserbook.co.uk/ and when it gives you the results select "Confirmed Independent" on the left hand side. Meet a few IFAs and as a price target try and get zero setup and 0.5% ongoing advice fee.

Alex