Can somebody help explain in simple terms..

karlos007

Hi all,
I am currently looking for a simpler way of controlling my pension plans. A way that allows me to easily understand and view what's happening on a daily basis and am considering Pesionbee as something that is more transparent and easier to navigate.
I am invested in a Collective Retirement Account - Uncrystallised with a Predominantly Active fund with Old Mutual Wealth and was taken after advice from an IFA with total platform and adviser fees of around 2.9%. It's valued at 115k and my age is 48. Unfortunately, I simply don't understand what this type of account means or how it works. My adviser does meet with me every now and then but I always end up more confused by the terminology used.
Can anyone explain simply what I'm invested in and how it works whilst also offering guidance on whether Pensionbee is more user friendly?
Thanks

Albermarle

I can not comment on that fund but I can say 2.9% is very high . Your fund has to make that every year before giving a positive return . If you take inflation into account then you need a return on average every year just to stand still. Maybe the advisor is being deliberately confusing so you do not realise this .
Your pot is not that large so a 1% advisor charge would be typical and then 1% MAX for fund and platform unless it is something unusual. So if you want to switch to another advisor than you could save about 1 % pa , maybe more.
If you changed to doing it yourself , Pension Bee is just one of many options , including other providers with simple offerings .
Before doing anything it would be a good idea to do some background reading on investing , unless you have some knowledge already . Even with providers like Pension Bee, choices still have to be made.
Pensions: Everything you need to know for retirement (moneysavingexpert.com)
Investing for beginners: how to get started (moneysavingexpert.com)
Investing for beginners: Why do we invest? - Monevator

Long-term investing: Increasing your chances of positive returns (nutmeg.com)

dunstonh

A way that allows me to easily understand and view what's happening on a daily basis and am considering Pesionbee as something that is more transparent and easier to navigate.

How would pensionbee be considered better on that front compared to an investment platform.  The investment platform is equally transparent. Indeed potentially more so as you pick the investment funds rather than having them picked for you.  The KIIDs are available for each of those investment funds.   So, transparency cannot be a justification on this front.

Plus, if it confuses you already, then information available is not going to be of help to you. 

I am invested in a Collective Retirement Account - Uncrystallised with a Predominantly Active fund with Old Mutual Wealth and was taken after advice from an IFA with total platform and adviser fees of around 2.9%.

That is a ridiculously high cost.  You can confirm the actual charges but if your OMW pension is on charge basis 3 (they have had 3 versions over the years. CB1/CB2 can be dirt cheap.  CB3 is pretty much modern standard) then you are looking at about 0.35% for the platform, your value is 1% territory for an IFA.  That makes it 1.35% leaving 1.55% for the fund.    There are not many funds that cost 1.55% OCF in the unbundled world nowadays.   Even if we assume some of that 1.55% is made up of transaction charges and/or incidental charges (which typically get ignored but need to be disclosed), the figure seems very high.

Their own in-house funds (Cirillium) are expensive but they are normally only used by their own FAs and not IFAs.  And even they are not that expensive.

 Unfortunately, I simply don't understand what this type of account means or how it works. My adviser does meet with me every now and then but I always end up more confused by the terminology used.

Tell the adviser you are confused.    If you sit there nodding, they will think everything is ok.   

Can anyone explain simply what I'm invested in and how it works whilst also offering guidance on whether Pensionbee is more user friendly?

You haven't told us what you are invested in.  Just the administrator for the pension (OMW) and that product type (Collective retirement account, which is a personal pension but is becoming a SIPP - or already is if you have already moved to their new software).

Pensionbee will be more user friendly as it has significantly less investment choice but you will still have choices to make.  Whether it will be better or not is unknown as we don't have the detail of what you have.    It may be that tweaking what you have is better.  Especially if you are charge basis 1 (which is a platform charge of £80.38 a year - not percentage-based). That coupled with a range of index funds can get you down to around 0.2x% p.a.   Far cheaper than what you have and far cheaper than pensionbee for doing much the same thing.

So, to take this discussion on, we need to know what investment funds you have.

Marcon

karlos007 said:

Hi all,
I am currently looking for a simpler way of controlling my pension plans. A way that allows me to easily understand and view what's happening on a daily basis and am considering Pesionbee as something that is more transparent and easier to navigate.

Daily basis? Why? Pension schemes are long term investments and fiddling around on that sort of frequency will drive you insane. You'll be plunged into gloom when the market experience their normal downward movements (never mind the real crashes), and lulled into a false sense of security when the market swing up.

Great idea to keep an eye on things on a regular basis, but once a month, quarter or even year suffices for those people who do so. Rather a lot rely on checking what's happening once in a career - just before they retire!

tacpot12

You don't really need to know much more about the Collective Retirement Account. It's a personal pension; you put money in, you get tax relief on your contributions into the pension, you invest your contributions and the tax relief for many years, and when you retire you have a pot of money to draw an income from (either by selling everything and buying income-producing assets, or by selling assets and withdrawing the proceeds of the sale, or a mixture). The only thing you need to worry about is are you investing in the right assets so that they grow at a rate that outpaces inflation, and are you paying too much in charges.

I used to look at my personal pension every 6 months or so, but I only made changes infrequently, perhaps ever five years or so. Having retired, I look at my pension every month, because I'm still monitoring my withdrawal strategy, but I only buy or sell ever 6 months or so, and trade annually in line with my strategy. 

zagfles

PensionBee will almost certainly be a lot easier to understand, and definitely much cheaper than what you have now.

karlos007

Thanks for the comments, they are all appreciated. As per my original post, it is clarity and peace of mind I am after. I'll chase up the charges and get clarification on why they are so high.