Self employed pension research

InhaleMood

AlanP_2 said:

At 37 with 40-60 years ahead of you (hopefully) I wouldn't bother with bonds, or if I did it would be down at the 10-15% range.

Your target at the moment is to grow the pot as big as possible before you start living off it and equities will typically provide the greater returns.

You haven't said how much you have in pensions currently or how much you are going to be adding but until you get to at least £50k, and some would say in to 6 figures, don't bother with individual funds. Use a multi-asset or global fund instead.

Multi asset examples are Vanguard Life Strategy, HSBC Global Strategy, Blackrock My Map and Multi-Index range from L&G.

These combine equities & bonds (and with a few property as well) in varying allocations to offer a range of low cost "risk" based funds from say 20% equities for low growth / safe to 80% equities for higher growth. So you pick the risk / reward level you feel comfortable at.

Global trackers are offered by all the big fund companies like Fidelity, Vanguard, HSBC, Blackrock (under the iShares brand) etc. They will all track one of the global indexes and the returns will be very similar. One might include EM, another won't. One might include smaller companies, another won't. Returns are still similar though and the more companies / markets you want covered the higher the cost (fractions of %).

Take a look at the monevator.com website for lots of articles and discussion around these sort of topics.

Thank you, really helpful!

I have narrowed it down to:

Vanguard Life Strategy 60%

Vanguard Life Strategy 80%

L&G Multi-Index 6

L&G Multi-Index 7

I'm leaning towards Vanguard 80% just because where all other variables are similar, the fees are slightly lower. 

Now, just to figure out how to set it all up!

Thanks again to everyone for the help

JohnWinder

tanyasharma said:

I did a little research yesterday. Does something like this look reasonable?

A thousand people could suggest a thousand variations on that to improve it in their eyes: more of this, less of that, is there currency hedging, are the corporate bonds 'high yield', is the 26% global fixed interest treasuries or corporate bonds etc.

I think you're on the right track.

Your choice could turn out better than half the other thousand, but no one knows yet. If you follow its progress closely you might spend part of the time wishing you had more bonds, and part wishing you had more stocks. But everyone does need to hold fast to what they finally decide to go with, and not have it up-ended by swapping to something that happens to be better for a while or is the new flavour of the month or finds a new evangelist.

You'll be putting a lot more money in over the years, so you can tweak it to better reflect your beliefs and understanding if they change a bit as they might as you keep reading up on the subject, hearing and evaluating others' views, and mature more yourself (the older we get the more we seem to like simplicity with investments). If you get more comfortable with equities their percentage holding can increase.

Here's Ferri's 'stages of investor learning':

1. Darkness – get rich quick. What hot stock tip can you get in the doctor’s lounge?
   
2. Enlightenment – reached by an epiphany that low cost index investing is the way to go.
3. Complexity – rabbit holes such as perfect optimal allocation, products, factor investing paralysis by analysis
4. Simplicity – you realize that none of the complexity matters, it is all about asset allocation. Complexity just provides more money for the financial industrial complex. Be simple to achieve your goals

Choose a sensible (for you) balance of equities and bonds/cash; keep it broad; keep costs down; use cap weighted indexing unless you're a committed believer in something else; and take your share of market returns (less costs).

Albermarle

This is a comparison of the various low cost multi asset funds available and their pros and cons.

Fund-of-funds: the rivals - Monevator

Marcon

tanyasharma said:

I'm 37, and probably 67

In that case this should be ideal for you: https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/self-employed-and-pensions/self-employed-and-pensions-help

Free and impartial.

InhaleMood

Marcon said:

tanyasharma said:

I'm 37, and probably 67

In that case this should be ideal for you: https://www.pensionsadvisoryservice.org.uk/about-pensions/saving-into-a-pension/self-employed-and-pensions/self-employed-and-pensions-help

Free and impartial.

That sounds interesting, thanks.

InhaleMood

tanyasharma said:

AlanP_2 said:

At 37 with 40-60 years ahead of you (hopefully) I wouldn't bother with bonds, or if I did it would be down at the 10-15% range.

Your target at the moment is to grow the pot as big as possible before you start living off it and equities will typically provide the greater returns.

You haven't said how much you have in pensions currently or how much you are going to be adding but until you get to at least £50k, and some would say in to 6 figures, don't bother with individual funds. Use a multi-asset or global fund instead.

Multi asset examples are Vanguard Life Strategy, HSBC Global Strategy, Blackrock My Map and Multi-Index range from L&G.

These combine equities & bonds (and with a few property as well) in varying allocations to offer a range of low cost "risk" based funds from say 20% equities for low growth / safe to 80% equities for higher growth. So you pick the risk / reward level you feel comfortable at.

Global trackers are offered by all the big fund companies like Fidelity, Vanguard, HSBC, Blackrock (under the iShares brand) etc. They will all track one of the global indexes and the returns will be very similar. One might include EM, another won't. One might include smaller companies, another won't. Returns are still similar though and the more companies / markets you want covered the higher the cost (fractions of %).

Take a look at the monevator.com website for lots of articles and discussion around these sort of topics.

Thank you, really helpful!

I have narrowed it down to:

Vanguard Life Strategy 60%

Vanguard Life Strategy 80%

L&G Multi-Index 6

L&G Multi-Index 7

I'm leaning towards Vanguard 80% just because where all other variables are similar, the fees are slightly lower. 

Now, just to figure out how to set it all up!

Thanks again to everyone for the help

I've just logged into my existing L&G pension and had a look at the other options if I want to transfer that.
There is another option of the L&G PMC Consensus Index Fund 3:
0.11% fee
73.7% Equities
19.8% Bonds
6.5% Other

It didn't come up on my other searches. Does anyone know anything about it? Is there something I'm missing, as it is Index, low fees, decent mix of assets.

Thanks,

Albermarle

tanyasharma said:

tanyasharma said:

AlanP_2 said:

At 37 with 40-60 years ahead of you (hopefully) I wouldn't bother with bonds, or if I did it would be down at the 10-15% range.

Your target at the moment is to grow the pot as big as possible before you start living off it and equities will typically provide the greater returns.

You haven't said how much you have in pensions currently or how much you are going to be adding but until you get to at least £50k, and some would say in to 6 figures, don't bother with individual funds. Use a multi-asset or global fund instead.

Multi asset examples are Vanguard Life Strategy, HSBC Global Strategy, Blackrock My Map and Multi-Index range from L&G.

These combine equities & bonds (and with a few property as well) in varying allocations to offer a range of low cost "risk" based funds from say 20% equities for low growth / safe to 80% equities for higher growth. So you pick the risk / reward level you feel comfortable at.

Global trackers are offered by all the big fund companies like Fidelity, Vanguard, HSBC, Blackrock (under the iShares brand) etc. They will all track one of the global indexes and the returns will be very similar. One might include EM, another won't. One might include smaller companies, another won't. Returns are still similar though and the more companies / markets you want covered the higher the cost (fractions of %).

Take a look at the monevator.com website for lots of articles and discussion around these sort of topics.

Thank you, really helpful!

I have narrowed it down to:

Vanguard Life Strategy 60%

Vanguard Life Strategy 80%

L&G Multi-Index 6

L&G Multi-Index 7

I'm leaning towards Vanguard 80% just because where all other variables are similar, the fees are slightly lower. 

Now, just to figure out how to set it all up!

Thanks again to everyone for the help

I've just logged into my existing L&G pension and had a look at the other options if I want to transfer that.
There is another option of the L&G PMC Consensus Index Fund 3:
0.11% fee
73.7% Equities
19.8% Bonds
6.5% Other

It didn't come up on my other searches. Does anyone know anything about it? Is there something I'm missing, as it is Index, low fees, decent mix of assets.

Thanks,

Pensions run by the big insurers , like L&G, Aviva, Standard Life etc have their own in house funds that are not available in the wider market . I have a Scottish Widows pension with some multi asset funds that only charge 0.1% + a platform fee .
My limited experience is that they often have a high UK % , sometimes up to 40% which is too high by most peoples opinions.
Otherwise can be a good option .