What pension planning advice do I need?

cfw1994

I would agree that OMG speaks sense here, and it is worth remembering that dunstonh is a (very helpful and active!) IFA here, so each have their perspectives and viewpoints.

& you have rightly identified that a few here are firmly in the DIY camp, through perhaps some years of experience.   
It isn't rocket science, and you do have time to learn a bit more to make you more confident to take control IF you want.   
If not, well, IFAs exist to service a portion of people who want or need that help!

As you are learning, much of this is opinion: there is no right or wrong.    Some will happily pop it all in a low-cost Vanguard LifeStrategy fund (eg LS60 or LS80) & be done.   Others like to have a bit more control, and perhaps even a bit of a 'gamble' with a few % of their funds.  Neither is right or wrong.

An IFA will try to gauge your attitude to risk and advise accordingly. 
From my perspective, I always feel it is in their best interests to support a 'low risk' approach.  It is far less likely for clients/customers to be upset if markets crash and they were invested in less volatile products....& questions on 'risk' invariably make people feel more cautious: "how would you feel if you faced a drop of 50% in your funds?"

If they have you drawing down only 2-3% of a DC pot, they there is very little chance it will ever run out: happy days!   

Equally, if the IFAs are taking a % against the funds under their management, perhaps they make a bit more money from you for a bit longer    

A slightly cynical perspective?    Maybe, but I'd challenge anyone to prove that to be inaccurate!

If you are reasonable with spreadsheets, I am happy to share one I have shared a few times: it can help share your own understanding of what you have coming in at different times (DB pensions, DC pots, State pensions).   

I have witnessed several family/friends cases where people have more money than they needed once they reach 70-75, and less energy or poorer health to take advantage of it!
Equally, I have attended too many funerals of friends and workmates who never got the chance to enjoy a retirement for various reasons.   Until proven wrong, we appear to only pass this way once: no pockets in shrouds!

Albermarle

So this forum is probably extremely biased against IFAs because of the knowledgeable people here.

I did not say that if you are referring to what I wrote .

I said a few posters were actually IFA's posting in a personal capacity and that were some posters with an anti IFA agenda .

I also said the majority of posters were probably DIY investors . However that does not imply that DIY investors are necessarily against IFA's just because they choose not to use them themselves . It's clear that many people can benefit from IFA advice in the right circumstances , especially those with little interest in personal finance or those with complicated finances/lives .

LV_426

Albermarle said:

So this forum is probably extremely biased against IFAs because of the knowledgeable people here.

I did not say that if you are referring to what I wrote .

Not at all I was speaking generally as by definition people giving out advice on here will be more knowledgeable and less inclined to use a financial advisor.

Redsox64

cfw1994 said: …..

If you are reasonable with spreadsheets, I am happy to share one I have shared a few times: it can help share your own understanding of what you have coming in at different times (DB pensions, DC pots, State pensions).   

Sorry for jumping in here but I would very interested in sharing your spreadsheet if you are happy to. I’m not great at drawing them up myself. Many thanks. 

Fabtasia

OldMusicGuy said:

ajfielden said:

Ok forgive me here if I'm asking dumb questions. Part of my problem is, I don't know what I don't know. I realise a lot of people on here have much more knowledge than me, and this is virtually the first place I've come to for more information.

Take my current pension scheme. As I mentioned in my original post, It's a SIPP, with a bewildering array of funds to choose from. I'm in the 'default' investment strategy. I have a day job which doesn't include poring over the performance of hundreds of funds and comparing them. Something I could ask an IFA to do is review this and advise on the best fund choice for me, bearing in mind my retirement plans. Is it worth doing that, or a waste of money?

So up to now I've done the sensible thing of contributing to pension schemes all my life. I just need to know at this point, with ideally 5 years until retirement, what needs to be done (if anything).
To me it boils down to a calculation of how much money will be in the pot at age 60, and if that can bridge the gap to other pension funds becoming available.

And is there any real benefits to using an organisation such as SJP? Yes they are expensive, but are they providing any services that justify the cost?

But anyway thank you for the constructive comments so far, it does help.

I was in exactly the same situation about 5 years before I retired. I paid several thousand pounds for some one-off financial advice (from HL). They suggested a few sensible things and created a multi-sector portfolio for me, mainly of actively managed funds. This prompted me to look at what they had suggested, and I realised it was complex and costly (even though there was no ongoing fee to them). I did a bit of reading (the John Edwards book I mentioned, plus others by Lars Kroijer) and decided that a simple, low cost strategy based on multi-asset funds was for me. It's working fine. You do not have to understand all the different funds, many (like me) just use a few well-diversified multi-asset funds. It takes very little time to manage, and does not involve poring over anything. You need to understand why this approach works and if it might be suitable for you before you pay thousands of pounds to anyone. 

Everything the financial adviser suggested I could have found out myself by doing a bit of reading on here. And I have ended up ignoring their investment strategy that I paid thousands of pounds for, because once I understood a bit more I realised it was not right for me. 

Are there any benefits to using SJP or an IFA? Yes, they will save you a bit of time by not having to do some reading and research. Will they perform any better after costs than you making a few simple decisions? You will never know. 

Do you want to pay thousands of pounds every year to save on a bit of reading and research time? That's a decision only you can take. My eyes were opened when I came on here (like you) and after I read that John Edwards book. Managing my pension is the most important aspect of my life for the next 30 plus years. I wanted to take control of that.

So please at least do a bit of reading using the resources suggested before you decide what to do. IMO you owe it to your future self. At the very least, read that John Edwards book I recommended, it will help you understand the basics that you need to know and will help you ask more relevant questions for any potential adviser.

Just wanted to say that John edwards book is part of kindle unlimited (you pay a monthly fee and get access to 10,000 of books free (more than with Amazon prime).  So have downloaded free as I subscribe (I read lots if fiction)

LV_426

Liking the Edwards book so far. Consolidating some of my pension pots into a SIPP looking possible. Vanguard Lifestrategy?

OldMusicGuy

ajfielden said:

Liking the Edwards book so far. Consolidating some of my pension pots into a SIPP looking possible. Vanguard Lifestrategy?

Vanguard Lifestrategy are very popular with many on here. Also BlackRock MyMap, HSBC Global Strategy and Legal & General offer similar types of multi-asset funds with varying risk levels. Worth reading up about all of them. 

Here's a good PensionCraft video: https://www.youtube.com/watch?v=jrNyl5u93xI
Also a good Monevator article: https://monevator.com/passive-fund-of-funds-the-rivals/  

LV_426

Thanks very much OMG you and everyone else here is providing some really useful info I'm very grateful. Just watching the PensionCraft video. I thought that fund performance graph was really interesting (lol you can tell I'm getting older). It illustrates perfectly how the growth aligns with the risk categorisation.

Albermarle

ajfielden said:

Liking the Edwards book so far. Consolidating some of my pension pots into a SIPP looking possible. Vanguard Lifestrategy?

VanGuard Life strategy is an investment , not a SIPP .

I am sure you understand that but it is a common mistake to mix up the pension , which is an administrative vehicle to handle the investments, payments , tax issues etc and where your actual money is invested within the pension.
Probably does not  help that some fund providers like Vanguard also offer a SIPP but you should keep them separate in your mind . 
For info here is a comparison of low cost multi asset funds .
https://monevator.com/passive-fund-of-funds-the-rivals/

LV_426

Albermarle said:

ajfielden said:

Liking the Edwards book so far. Consolidating some of my pension pots into a SIPP looking possible. Vanguard Lifestrategy?

VanGuard Life strategy is an investment , not a SIPP .

I am sure you understand that but it is a common mistake to mix up the pension , which is an administrative vehicle to handle the investments, payments , tax issues etc and where your actual money is invested within the pension.
Probably does not  help that some fund providers like Vanguard also offer a SIPP but you should keep them separate in your mind . 
For info here is a comparison of low cost multi asset funds .
https://monevator.com/passive-fund-of-funds-the-rivals/

Thanks for the clarification. I notice in that video he does talk about selecting equivalent funds to replicate what the Lifestrategy plan does, but at a lower cost. That would put the onus on you to more actively manage it (rebalance as he puts it).