Fidelity workplace pension

Tedmaul_2

My mum has retired about 6 months ago and has about 70k in a fidelity work place pension. She has not touched this yet and has no need to do so.  The 70k seems to be invested in a bond fund and cash.  When looking to swap investments into a simple global tracker there doesn't seem to be much choice?.  Would she need to transfer the pension to a sipp be able to access low cost index trackers?.  

xylophone

Fidelity offers a SIPP.
https://www.fidelity.co.uk/what-is-a-sipp/

https://www.fidelity.co.uk/planning-guidance/investment-finder/

dunstonh

Fidelity's workplace pension has a cut down fund range.    However, it should still carry a fairly decent range. Including their own-brand trackers.

 When looking to swap investments into a simple global tracker

And does your mum have the risk profile to handle a 50% loss in the value of that pension?     It is very unusual for a retired person to go right up the risk scale like that.

Tedmaul_2

dunstonh said:

Fidelity's workplace pension has a cut down fund range.    However, it should still carry a fairly decent range. Including their own-brand trackers.

 When looking to swap investments into a simple global tracker

And does your mum have the risk profile to handle a 50% loss in the value of that pension?     It is very unusual for a retired person to go right up the risk scale like that.

I admittedly only had a quick scan but didn't notice any simple global index fund.  Well she wouldn't be happy with a 50% loss but 
she has over 200k in savings accounts so feel maybe this pension needs to be put fully into equities?

dunstonh

Tedmaul_2 said:

dunstonh said:

Fidelity's workplace pension has a cut down fund range.    However, it should still carry a fairly decent range. Including their own-brand trackers.

 When looking to swap investments into a simple global tracker

And does your mum have the risk profile to handle a 50% loss in the value of that pension?     It is very unusual for a retired person to go right up the risk scale like that.

I admittedly only had a quick scan but didn't notice any simple global index fund.  Well she wouldn't be happy with a 50% loss but 
she has over 200k in savings accounts so feel maybe this pension needs to be put fully into equities?

But does your mum feel that way?    Advising a family member to take more risk than they can handle can cause families to fall apart when a crash comes along.     She is retired and has no ability to replace that money.    You need to be careful that you are not putting her in what you would have because she is not you.      Yes, some equities do make sense but going from 0% to 100% is one hell of a jump.

AlanP_2

Tedmaul_2 said:

dunstonh said:

Fidelity's workplace pension has a cut down fund range.    However, it should still carry a fairly decent range. Including their own-brand trackers.

 When looking to swap investments into a simple global tracker

And does your mum have the risk profile to handle a 50% loss in the value of that pension?     It is very unusual for a retired person to go right up the risk scale like that.

I admittedly only had a quick scan but didn't notice any simple global index fund.  Well she wouldn't be happy with a 50% loss but 
she has over 200k in savings accounts so feel maybe this pension needs to be put fully into equities?

Depending on other income levels e.g. State Pension then withdrawals from the Fidelity scheme are possibly taxable.

Why would you suggest investing aggressively inside the taxabale account and keeping the tax free amount in cash? All that will do is increase any future tax payments if the pension is accessed.

If your mother agrees with you that increasing the overall risk level of her cash / investment portfolio is sensible she could leave the pension as it is and invest some of the cash into equities through a S&S ISA where growth would be tax free.

The more fundamental question is - Does she need to take any additional risk at all to meet her objectives or has she "won" the game already?  

Albermarle

AlanP_2 said:

Tedmaul_2 said:

dunstonh said:

Fidelity's workplace pension has a cut down fund range.    However, it should still carry a fairly decent range. Including their own-brand trackers.

 When looking to swap investments into a simple global tracker

And does your mum have the risk profile to handle a 50% loss in the value of that pension?     It is very unusual for a retired person to go right up the risk scale like that.

I admittedly only had a quick scan but didn't notice any simple global index fund.  Well she wouldn't be happy with a 50% loss but 
she has over 200k in savings accounts so feel maybe this pension needs to be put fully into equities?

Depending on other income levels e.g. State Pension then withdrawals from the Fidelity scheme are possibly taxable.

Why would you suggest investing aggressively inside the taxabale account and keeping the tax free amount in cash? All that will do is increase any future tax payments if the pension is accessed.

If your mother agrees with you that increasing the overall risk level of her cash / investment portfolio is sensible she could leave the pension as it is and invest some of the cash into equities through a S&S ISA where growth would be tax free.

The more fundamental question is - Does she need to take any additional risk at all to meet her objectives or has she "won" the game already?  

It does make more sense to invest more aggressively outside the SIPP , but a cash/bond fund in the SIPP is still maybe too cautious , or more importantly not a balanced portfolio. So maybe a good idea to at least convert a % of it into something more equity based, to get a better balance  of investments in the SIPP and less likely it will lose out to inflation. 
When looking to swap investments into a simple global tracker there doesn't seem to be much choice?. 
OP - Just because a global index tracker is often recommended, is simple and is cheap does NOT mean that is is not risky, especially in the short to medium term ( means anything less than 7 to 10 years )