BlackRock Consensus 85 to HL Growth Fund?

Silverking

Hi all,

I'm looking for some advice re my pension, I'll be totally upfront and say I'm finding it hard to understand a lot of it.

I'm currently 40 and my pension is embarrassingly low, I've been in the same job for almost 15 years with pretty low pay. I'm intending to look for a new job this year, I know I can earn more but I've been too complacent. I'm paying 5% of my pay towards my pension currently but I'm hoping if I can get a new job I'll be able to contribute more.

The reason for the post is that I received a letter from Hargreaves Lansdown (my only pension) asking if I wanted to switch pensions. Currently, my company pension payments are paid into BlackRock Consensus 85 (risk factor of 5)...and they asked if I want to switch to their new default pension fund - HL Growth Fund, which has the same risk factor of 5. What else should I be looking out for when I make my decision? 

They're also asking if I would to switch lifestyling off or sign up for their new lifestyling arrangement. The current arrangement is to sell the investments and hold them as cash 5 years prior to retirement. The new arrangement will move investments into the Blackrock MyMap4 fund, 10 years before retirement. I would think that as I need as much money as I can, the new arrangement would be better for me...

I have to reply by March 25th so I've left it late but if anyone has any advice/tips I'll really appreciate it.

JohnWinder

Only one question I can see there - 'what to look out for'.  I'd say: in whose interest is this request from HL?

You're in a fund that earns Blackrock some fees from you, and now HL wants to move you out of that into a fund whose name includes HL. Sounds to me like HL wants that slice of the action as well as whatever else they get from you.  It's unlikely to be a dramatically worse option or the public opprobrium that results from that sort of behaviour can be pretty bad - but HL has form in that space with the Woodford fund I think, so it isn't always a deterrent.

So HL has a new lifestyle arrangement. Isn't it likely they'll have several more new ones before you get from 40 years old to it being relevant? I'd label it a distraction from more important issues.

Bimbly

This isn't the same as your situation, but this question arose after a poster received a similar letter from HL, so may be of interest:

https://forums.moneysavingexpert.com/discussion/6342368/hl-pension-letter-received-were-changing-the-way-lifestylling-works#latest

Meanwhile, it maybe that the HL fund is cheaper than the BlackRock one as it is held in house. It's worth looking at how both are invested and how their lifestyling works to see which would be better for you. You are absolutely right to consider what is best for you at this stage.

Audaxer

Silverking said:

Hi all,

I'm looking for some advice re my pension, I'll be totally upfront and say I'm finding it hard to understand a lot of it.

I'm currently 40 and my pension is embarrassingly low, I've been in the same job for almost 15 years with pretty low pay. I'm intending to look for a new job this year, I know I can earn more but I've been too complacent. I'm paying 5% of my pay towards my pension currently but I'm hoping if I can get a new job I'll be able to contribute more.

The reason for the post is that I received a letter from Hargreaves Lansdown (my only pension) asking if I wanted to switch pensions. Currently, my company pension payments are paid into BlackRock Consensus 85 (risk factor of 5)...and they asked if I want to switch to their new default pension fund - HL Growth Fund, which has the same risk factor of 5. What else should I be looking out for when I make my decision? 

They're also asking if I would to switch lifestyling off or sign up for their new lifestyling arrangement. The current arrangement is to sell the investments and hold them as cash 5 years prior to retirement. The new arrangement will move investments into the Blackrock MyMap4 fund, 10 years before retirement. I would think that as I need as much money as I can, the new arrangement would be better for me...

I have to reply by March 25th so I've left it late but if anyone has any advice/tips I'll really appreciate it.

HL funds tend to be expensive on top of their platform costs. 

If your current arrangements is to switch your investments to cash 5 years before retirement, that seems a particularly bad idea as most people nowadays keep invested throughout retirement. So that is something worth changing, but does not necessarily mean you should move to HL.

Even if you did move your pension to HL, I would look at other globally diversified global funds rather than their own expensive funds. However I would also compare the platform costs for SIPPs with other mainstream platforms, as HL tends to be one of the most expensive.

ian16527

The HL fund is cheap and looks like a rebadged L&G fund. Its very new(DEC 2021) so not much data.
I would stick with the Blackrock one for a while longer if you are happy with the risk rating and return

k_man

Assuming it is this fund, the fees look comparable to Consensus 85, so not expensive for a HL fund

0.10% Vs 0.09%

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hl-growth-fund-accumulation

https://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/b/blackrock-consensus-85-accumulation-inclusive

noclaf

ian16527 said:

I would stick with the Blackrock one for a while longer if you are happy with the risk rating and return

This would be my thoughts too, as other posters have mentioned switching funds would mainly benefit HL. The fund fee's difference appears to be negligible and personally I would rather stick with an established fund from a well established provider (BlackRock). Nothing wrong with HL/L&G but not sure there is a need for a change unless you are not happy with the risk profile, fund allocation etc

Silverking

JohnWinder said:

Only one question I can see there - 'what to look out for'.  I'd say: in whose interest is this request from HL?

Yes, the information I received was from HL.

It shows how naive I am as I assumed Blackrock was just another HL fund so I was wondering why they wanted to switch me from one to the other. It now makes far more sense, thanks to the above comments, thank you all for your responses.

With the HL fund having no real historical data there doesn't seem like I can really make an informed decision until it has been running for a while.

I have 1 more question, it might be a silly one but I'll ask it anyway The pension was set up through my company, so we were just given login details to HL and advised our pension payments were being paid into the Blackrock fund. If I wanted to switch to another HL fund at some point, could I just ask HL to switch it? Or would it be a case of having to stick with whatever my company setup?

ian16527

Ask HL - they seem to have good customer service set up from other posts on here.

The last 3 companies I worked for would stick the contributions in a default medium risk fund initially then use lifestyling to reduce the risk nearer retirement age. 

There was always an option to self select. In my current case its with L&G funds but only about 10, so a limited selection.

I also think the new lifestyling choice to use MyMap4 is to do with more people using drawdown now rather than buying an annuity. If you want to drawdown your pension, then it is probably a good idea to use the new option and keep your money invested for the last 5 years rather than in cash