Sorting out my pensions

JuniorG

At 52 I'm a bit late in analysing my pensions, and could use some help on where to start.  This forum helped me last year when I panicked that I hadn't done enough, and thankfully my calculations say I still have a chance of retiring at 60 at an income level my wife and I calculate we need, providing that I take the right actions now. My target date is 1st Jan 2024, and I would love to hear any advice or pointers to good information.

I estimate my savings and investments will give us half of our pot.  The Savings and Investments forum has helped me start to rebalance from a lump of cash and single stock into medium-risk global trackers (VLS 60 and HSBC Global Strategy Balanced) and I will use CGT and ISA allowances for the next few years to sell down the stock and buy more ISAs.  I think I've got my head around risk levels, growth expectations, fees and tax liabilities enough to know I've at least started on the journey and can learn more from here.

But I'm not so confident about my pension pot, which is a mixed bag from various employments over the years.  
3 things are top of mind for me:

1) My online state pension forecast says I will get a full state pension, but this seems wrong.  It lists out every year since I was 16 as a full NI year, but I know I was contracted out for a large part of this.   Is it unusual for the online info to be so wrong, or should I trust it?

2) Overall my pensions are growing, and they're only c.1% in fees. But they seem behind compared to my similar risk ISAs (VLS 60 and HBCS Global Strategy Balanced) - is that due to lower fees?  That's got me considering a SIPP, although it's a big jump for me.  Are my pensions really a good medium risk selection?

3) Some are in Lifestyle plans and I'm not sure they work for me. If I'm unlikely to be buying an annuity when I'm 60, I'm not convinced the whole pot should transfer to low risk by retirement age.  I'm thinking I might be better to think in terms of separate buckets (3 years ahead in cash; 3-10 years ahead in low risk 20% equity funds; 10-20 years ahead in medium risk 40% equity funds; 20 years and beyond in 60-80% equity funds).  If I'm going to change course, I think now is the time.

Here's the current detail:

My current workplace pension is with Scottish Widows Group Personal Pension

- This is £157k in an aggressive 100% equities fund (SW SSgA 50:50 Global Equity Index Pension) which has grown around 52% over the last 5 years.

An old work pension is in a DB scheme with a transfer value of £196k or an annual pension of £9k. It seems logical to me to stick with the £9k.

3 other pensions are with Standard Life

- £266k is an old workplace pension in a Standard Life Flexible Retirement Plan. This has grown around 40% over 5 years.  It's in a lifestyle plan (4BALANCED II UNIVERSAL), which is currently 80/20 equities/bonds in the Standard Life Managed Pension Fund.  8 years from retirement this will start gradually switching over to lower risk funds.  

- £65k is in a Personal Pension Plan set up around 1990.  Not a lifestyle plan, but is invested in the same fund as above, so has also grown around 40% in the last 5 years.

- £11k in a Contracted in Money Purchase plan also set up in the early 90's. This is in a lower risk fund Standard Life Active Plus III Pension Fund, and has grown around 24% in the last 5 years.  It's in another lifestyle plan (Active Plus III Universal SLP) which seems to start transferring 9 years before retirement.
It feels like it all needs consolidation.  Any pointers where to start?

jamjar92

1) My online state pension forecast says I will get a full state pension, but this seems wrong.  It lists out every year since I was 16 as a full NI year, but I know I was contracted out for a large part of this.   Is it unusual for the online info to be so wrong, or should I trust it?

Becuase the rules changed in 2016, with COPE etc, you have gained, as you paid lower NI like me, but will get full state pension. My forecast says I have work 4 more years.

2) Overall my pensions are growing, and they're only c.1% in fees. But they seem behind compared to my similar risk ISAs (VLS 60 and HBCS Global Strategy Balanced) - is that due to lower fees?  That's got me considering a SIPP, although it's a big jump for me.  Are my pensions really a good medium risk selection?

Treat these the same as your saving in ISA, they are just into a different tax wapper, there is no difference between an ISA or Pension investment in that respect.

3) Some are in Lifestyle plans and I'm not sure they work for me. If I'm unlikely to be buying an annuity when I'm 60, I'm not convinced the whole pot should transfer to low risk by retirement age.  I'm thinking I might be better to think in terms of separate buckets (3 years ahead in cash; 3-10 years ahead in low risk 20% equity funds; 10-20 years ahead in medium risk 40% equity funds; 20 years and beyond in 60-80% equity funds).  If I'm going to change course, I think now is the time.

With life style funds just make sure you have a correct retirement date, probably have to transfer these to a modern SIPP account so you can do drawdown in the future. For now what are the charges, if they are expensive it might be worth transfering sooner than later.

Same for
Scottish Widows Group Personal Pension and Standard Life if the fees are reasonable and they are growing, again I assume you are thinking of drawdown on these at somepoint in the future, check they that these pension type can be drawndown.

By transferring your pensions to Vanguard, you could probably invest in the same funds but via a different tax wrapper, as you do with your ISA's.

Others will be able here to comment and am sure.

Albermarle

 Overall my pensions are growing, and they're only c.1% in fees.

Often ex workplace pensions with SW , SL etc enjoy a discount from the normal fund fees. This is often not obvious from the paperwork so worth a check with SW & SL just to make sure .

Some are in Lifestyle plans and I'm not sure they work for me. If I'm unlikely to be buying an annuity when I'm 60, I'm not convinced the whole pot should transfer to low risk by retirement age.

If you are planning to go into drawdown, then lifestyle pensions are not really suitable for the reasons you state .

Some derisking as you near retirement and have built up a good pot is normal ( although some think sticking with high equities is better, if you have good nerves) but these lifestyle pensions can take that a step too far . One rather short term, blunt and unsophisticated way to get around this is to change your retirement date to an older age .

In general some of these SL managed pension funds are not great performers . Often they are very heavily weighted towards UK ( 40 % ?) which will have dragged their performance in recent times .

An old work pension is in a DB scheme with a transfer value of £196k or an annual pension of £9k. It seems logical to me to stick with the £9k.

With plenty of DC pension funds already , keeping a guaranteed income seems sensible.

tacpot12

I agree that Lifestyling is inappropriate if you are not planning to buy an annuity. I think your idea of buckets is a better system. 

JuniorG

Thank you jamjar92 and Albermarle.   

That's good news on my State Pension, jamjar92.  It says I'm only 2 years contributions off £175.20 per week.  For sure I was contracted out during a portion of this time.

That's a great point on fees, Albermarle.  If the Standard Life workplace pension might have lower fees I wonder if I can consolidate the other 2 into there.  It doesn't seem to make sense to have 3 plans on different lifestyle plans either.  

I think I'll look into the fees and also see what the lifestyle and drawdown flexibility options are and see if I can get them into one.  I do like the idea of just bumping the age up, rather than start de-risking so early.  

I can also manage the funds online, so will have a look at the choice to see if there's anything that might improve the growth, although I'm hopeful the next 10 years will be better than the last 10 for UK equities.

If I can feel confident it's structured right, I can try to put any spare savings into pensions after the ISAs each year.  I'm just not sure yet if that's SL, SW or a SIPP!

Many thanks for your help.