Consider This... (Vanguard Portfolio)

Audaxer

Vet said:

Okay thank you! Very interesting. I currently invest £1150 per month and its around £250 LS80, £300 - TR2050 and the rest in high dividend yield. Do you think this needs some adjusting?
My reasoning behind this was that as the time for retirement comes closer, it would be nice to have money already with risk reduction. 

Unless you would be buying an annuity at retirement, there is no point in adjusting risk a great deal when retirement is near. The reason being is that it is not worth even considering an annuity until later on in retirement when better rates will be available. At the start of retirement when you may have 30 years or more ahead of you, most retirees keep funds invested and drawdown income each year. To do this successfully you need to still have a decent percentage of equities.

In your position I would just have a VLS80 in your pension, and put as much pension contribution into that as you can each year in view of the fact you will get 40% tax relief.  

Albermarle

For the OP just for clarity - if you do increase your pension contributions , the simplest way would be to just increase your % contributions to your workplace pension. If your employer operates a salary sacrifice scheme for pension contributions , then even better to do it this way. By the way if your employer does not operate this scheme, you will probably have to claim some of the tax relief back from HMRC. Maybe you do that already ?
Some other posters mention a SIPP. So an alternative to increasing contributions to your workplace scheme , would to be to open a separate SIPP and make extra contributions into that from your savings/salary . The reason to do this could be a better choice of investments than in your workplace pension . However you do it the main thing is to increase the contributions though !

Vet

Albermarle said:

For the OP just for clarity - if you do increase your pension contributions , the simplest way would be to just increase your % contributions to your workplace pension. If your employer operates a salary sacrifice scheme for pension contributions , then even better to do it this way. By the way if your employer does not operate this scheme, you will probably have to claim some of the tax relief back from HMRC. Maybe you do that already ?
Some other posters mention a SIPP. So an alternative to increasing contributions to your workplace scheme , would to be to open a separate SIPP and make extra contributions into that from your savings/salary . The reason to do this could be a better choice of investments than in your workplace pension . However you do it the main thing is to increase the contributions though !

I think i'll look into this from Monday. I've only recently in the past few weeks changed from being a basic to higher rate tax payer so this is all very new. I've been researching pros and cons with regards to workplace vs SIPP. Much appreciated advice and very much taken on board.

Thrugelmir

A_T said:

I wouldn't use the high dividend tracker it's likely to hinder growth. I'd use VWRL instead.

All one needs is a core of an ETF covering the S&P 500 and active fund covering emerging markets.  The other 2, 800 odd holdings aren't going to add much value in overall terms for the foreseeable future. 

Sailtheworld

At 26 I wouldn't be bothering worrying about holding bonds or chasing dividends. I'd be 100% VWRL with a bias towards a SIPP.

DireEmblem

Sailtheworld said:

At 26 I wouldn't be bothering worrying about holding bonds or chasing dividends. I'd be 100% VWRL with a bias towards a SIPP.

Are you picking VWRL rather than Lifestrategy due to the ability to write off the platform fees on a free trade platform?  If so, then I would go VWRP - its the accumulation version.

drphila

Thrugelmir said:

All one needs is a core of an ETF covering the S&P 500 and active fund covering emerging markets.  The other 2, 800 odd holdings aren't going to add much value in overall terms for the foreseeable future. 

So you're saying there's nothing significant in the European and Japanese markets?

Thrugelmir

drphila said:

Thrugelmir said:

All one needs is a core of an ETF covering the S&P 500 and active fund covering emerging markets.  The other 2, 800 odd holdings aren't going to add much value in overall terms for the foreseeable future. 

So you're saying there's nothing significant in the European and Japanese markets?

My comment is in the context that the Top 20 holdings account for over 20% of the ETF's value.  Of these only Nestle is represented at some 0.60%.  The major US stocks have a market capitalisation that exceeds all the stocks listed on the European and Japanese bourses combined.  Bulk of the recent growth has been driven by a select few. 

HCIMbtw

Simplify your thought process on all of this. 

As a higher rate tax payer try to invest everything necessary to bring you in line with being a standard rate tax payer into a pension. If your work don't allow for paying in at that level set up a SIPP with Vanguard. The logic being you effectively get 40% tax benefit on those contributions. 

For the rest of your savings just select an appropriate global multi asset fund in line with your risk tolerance and invest throguh a S&S ISA. I am 33 and invested in 100% equity, my wife 80%. 

When your holdings with Vanguard reach about £25-40k or so, it becomes financially better to transfer the money as a lump sum from vanguard to a platform like IWeb, so you do not pay a recurring charge on the balance held. You can keep it invested in the same fund and you keep the Vanguard account open for regular contributions. 

I would suggest it is a bit of a waste of time to consider blending a mix of multi asset funds... but you can do that if you really want. 

Either way at your salary that would be my approach, once I had got a house purchase out of the way (which I would be aiming to complete in a next year market slump). 

Albermarle

I would suggest it is a bit of a waste of time to consider blending a mix of multi asset funds... but you can do that if you really want. 

Even between the best known low cost ones , there are some differences in the way they are constructed and therefore the performances are not the same ( although clearly not huge differences ) 

Some have a fixed % equity , some not . Some have a UK bias , some not . For example.