Aviva pension fund selection

granta

george4064 said:

masonic said:

Could you not just split between the Blackrock World (ex-UK) tracker and their own UK index tracker fund?

I believe the BlackRock World ex-UK Equity tracker tracks the FTSE Developed ex-UK, so that combined with the BlackRock UK equity index tracker would mean no exposure to emerging markets. Wouldn’t it be sensible to add some Developing Markets to the portfolio?

My partner’s pension is with Aviva, currently invested in the My Future Focus Growth Fund and I am helping her decide where to switch the assets to. My latest thinking is:

70% BlackRock World ex-UK Equity Tracker
20% BlackRock Emerging Markets Equity Tracker
10% BlackRock UK Equity Tracker

That's helpful, I had not thought about the definition of 'World' missing EM.
But in the scenario I was looking at (and my interpretation of @masonic 's suggestion) was to keep 50% in the Future focus fund (which has emerging market exposure) and move the rest to the BlackRock World tracker. The main purpose of that is to dilute the 25% bond allocation/increase equity exposure. I guess I could move it all into a separate trackers as per your thinking above but I like that the Future focus has some exposure to property/other asset classes too. 

aroominyork

Currently have a work Aviva pension (last 6 years) with active payments by employer and me. All payments since the beginning have been going into this default fund: 

Aviva Pensions My Future Focus Growth S6

It uses a Lifestyle approach though I am currently in the growth stage with 15-20 years to retirement. Having now looked at the fund, it is around 25% bonds, 43% global equity; 13% UK equity. When I look at this fund on Trustnet, it has a 1 star rating but I don't know the reasons for this as performance has been ok.

For anyone looking at the default Aviva funds, it's important to notice that the way it adjusts allocations between the Growth and Consolidated funds seems to assume you will buy an annuity on retirement. 10% is invested in the Growth fund for each year (or part of) before retirement so, for example, in the 2-3 years before retirement you hold 30% in Growth and 70% in Consolidated.

The Growth fund holds 56% equities, 25% fixed interest, 7% property, 12% cash.

The Consolidated fund holds 11% equities, 64% fixed interest, 2% property, 23% cash.

I am within ten years of retirement and plan to use drawdown, not buy an annuity, so I am giving Aviva an instruction to invest my contributions 100% in Growth.

masonic

aroominyork said:

Currently have a work Aviva pension (last 6 years) with active payments by employer and me. All payments since the beginning have been going into this default fund: 

Aviva Pensions My Future Focus Growth S6

It uses a Lifestyle approach though I am currently in the growth stage with 15-20 years to retirement. Having now looked at the fund, it is around 25% bonds, 43% global equity; 13% UK equity. When I look at this fund on Trustnet, it has a 1 star rating but I don't know the reasons for this as performance has been ok.

For anyone looking at the default Aviva funds, it's important to notice that the way it adjusts allocations between the Growth and Consolidated funds seems to assume you will buy an annuity on retirement. 10% is invested in the Growth fund for each year (or part of) before retirement so, for example, in the 2-3 years before retirement you hold 30% in Growth and 70% in Consolidated.

The Growth fund holds 56% equities, 25% fixed interest, 7% property, 12% cash.

The Consolidated fund holds 11% equities, 64% fixed interest, 2% property, 23% cash.

I am within ten years of retirement and plan to use drawdown, not buy an annuity, so I am giving Aviva an instruction to invest my contributions 100% in Growth.

This is an important point. I haven't looked in too much detail as I am still some way off being lifestyled, but I think you can adjust your retirement date, kicking it into the long grass, to avoid this happening (default is 65).

Albermarle

masonic said:

aroominyork said:

Currently have a work Aviva pension (last 6 years) with active payments by employer and me. All payments since the beginning have been going into this default fund: 

Aviva Pensions My Future Focus Growth S6

It uses a Lifestyle approach though I am currently in the growth stage with 15-20 years to retirement. Having now looked at the fund, it is around 25% bonds, 43% global equity; 13% UK equity. When I look at this fund on Trustnet, it has a 1 star rating but I don't know the reasons for this as performance has been ok.

For anyone looking at the default Aviva funds, it's important to notice that the way it adjusts allocations between the Growth and Consolidated funds seems to assume you will buy an annuity on retirement. 10% is invested in the Growth fund for each year (or part of) before retirement so, for example, in the 2-3 years before retirement you hold 30% in Growth and 70% in Consolidated.

The Growth fund holds 56% equities, 25% fixed interest, 7% property, 12% cash.

The Consolidated fund holds 11% equities, 64% fixed interest, 2% property, 23% cash.

I am within ten years of retirement and plan to use drawdown, not buy an annuity, so I am giving Aviva an instruction to invest my contributions 100% in Growth.

This is an important point. I haven't looked in too much detail as I am still some way off being lifestyled, but I think you can adjust your retirement date, kicking it into the long grass, to avoid this happening (default is 65).

You can normally change the retirement date   but not sure if it is OK to actually go over 65.
It is a good temporary solution but probably ideally it would be better to change product .
Normally they offer a lifestyle drawdown fund, which will not derisk as much as the annuity one. 

masonic

Albermarle said:

masonic said:

aroominyork said:

Currently have a work Aviva pension (last 6 years) with active payments by employer and me. All payments since the beginning have been going into this default fund: 

Aviva Pensions My Future Focus Growth S6

It uses a Lifestyle approach though I am currently in the growth stage with 15-20 years to retirement. Having now looked at the fund, it is around 25% bonds, 43% global equity; 13% UK equity. When I look at this fund on Trustnet, it has a 1 star rating but I don't know the reasons for this as performance has been ok.

For anyone looking at the default Aviva funds, it's important to notice that the way it adjusts allocations between the Growth and Consolidated funds seems to assume you will buy an annuity on retirement. 10% is invested in the Growth fund for each year (or part of) before retirement so, for example, in the 2-3 years before retirement you hold 30% in Growth and 70% in Consolidated.

The Growth fund holds 56% equities, 25% fixed interest, 7% property, 12% cash.

The Consolidated fund holds 11% equities, 64% fixed interest, 2% property, 23% cash.

I am within ten years of retirement and plan to use drawdown, not buy an annuity, so I am giving Aviva an instruction to invest my contributions 100% in Growth.

This is an important point. I haven't looked in too much detail as I am still some way off being lifestyled, but I think you can adjust your retirement date, kicking it into the long grass, to avoid this happening (default is 65).

You can normally change the retirement date   but not sure if it is OK to actually go over 65.
It is a good temporary solution but probably ideally it would be better to change product .
Normally they offer a lifestyle drawdown fund, which will not derisk as much as the annuity one. 

The issue with changing fund is that this incurs higher fees in my case, only the default fund benefits from a reduction in charges, although partially transferring out to a SIPP would solve that issue and offer more flexibility.

aroominyork

Aviva told me to send a signed letter specifying the fund allocation I want, so I expect the system can be set to override the years-to-retirement allocations. When I send the letter I will ask them to confirm it will not change the 0.60% all-in fee.

granta

aroominyork said:

Aviva told me to send a signed letter specifying the fund allocation I want, so I expect the system can be set to override the years-to-retirement allocations. When I send the letter I will ask them to confirm it will not change the 0.60% all-in fee.

I seem to be able to initiate a fund switch online without having to send a signed letter, though haven't formally started the process so maybe it will ask me at the end? 
Good point also about extending the retirement date to prevent it from automatically switching your allocations. I do remember Aviva telling me a while ago that if you left the default fund entirely you would no longer benefit from the lifestyling approach and could not re-access it.

AlanP_2

Before you get too far in making your choices check with Aviva that you can mix lifestyled funds with non-lifestyled. My wife's with Standard Life you can't, you either lifestyle or you don't. 

Albermarle

I seem to be able to initiate a fund switch online without having to send a signed letter, though haven't formally started the process so maybe it will ask me at the end? 

I think with some providers you can switch funds on line but if you want to change where new contributions go you have to call them .

granta

Thanks for the advice everyone, good points to think about that I was not aware of. I will speak with them first (if I can get through!) but if I can't mix a lifestyle fund with a non-lifestyle fund, then I will need to rethink how I tweak the portfolio.