Saving for retirement outside of a pension - Vanguard LifeStrategy?

reck_uk

I’d like to start saving some money outside of my pension for retirement to give me some cover for emergencies and bigger purchases. 

I’m 46 and would be looking to pay in around £100 a month over the next 10 - 15 years (hopefully).

I was looking at a Vanguard LifeStrategy 80% equity fund as a possible option, what are your views on that? Also just for confirmation, is the Vanguard LifeStrategy just their name for a S&S ISA?

If not Vanguard what other options would you suggest I look at for my scenario?

Thanks

dunstonh

Also just for confirmation, is the Vanguard LifeStrategy just their name for a S&S ISA?

No.  Lifestrategy is the name for their multi-asset funds.   Those funds can be held in a pension, ISA, offshore bond, onshore bond and unwrapped.

If not Vanguard what other options would you suggest I look at for my scenario?

The funds are more a personal choice based on the capacity for loss, risk level and understanding/behaviour.    

Why are you selecting ISA over pension (pension trumps ISA for most people as long as they can wait until the retirement years).

AlanP_2

VLS is a product range from Vanguard that can be held inside an ISA, SIPP or non-wrapped account.

Out of interest, why outside pension if it is for retirement? Why not put it in pension wrapper and get the tax benefits? 

reck_uk

Two reasons for not putting it in a pension.

In retirement I want to have a mixture of savings and pensions. I’m going to be shortly increasing my pension contribution as much as I can afford and to tackle the savings side Im looking to save into something like a S&S ISA so I have some funds available come retirement. 

Secondly I don’t want to lock every spare penny I have into a pension that I won’t be able to access until 58. I intend to put the bulk of any “spare” cash into my pension but still want to save a smaller amount outside of my pension. I’d rather split my investment between different products giving me more flexibility and a bit more diversity come retirement. Also will allow me access if I need some of it in the next 15 years or so. 

Thanks for clarifying the Vanguard LifeStrategy product, I didn’t realise it could be taken outside of an ISA wrapper. Why would you want it outside of an isa though as won’t this leave it exposed to tax in future years? Possibly not so much of an issue with the small amount I will be paying but still. 

How do you specify if you want the product in an ISA or not?

Thrugelmir

Do you have an emergency fund ? Do you have savings for major items of expenditure, i.e. replacement of windows, car, boiler. roof etc. Not paying interest to fund these is a major bonus over the years. 

eskbanker

reck_uk said:

How do you specify if you want the product in an ISA or not?

You choose a platform provider with whom to open an ISA, and once you've done that, you can add money to your account and use it to buy into VLS or any other supported investments.

dunstonh

In retirement I want to have a mixture of savings and pensions.

That is logical.  Cash savings are needed to short term money.

I’m going to be shortly increasing my pension contribution as much as I can afford and to tackle the savings side Im looking to save into something like a S&S ISA so I have some funds available come retirement. 

S&S ISA is investing.  Not saving.  

The funds in a pension would be available come retirement just as an S&S ISA would be.  However, the pension would beat S&S ISA.

I’d rather split my investment between different products giving me more flexibility and a bit more diversity come retirement. Also will allow me access if I need some of it in the next 15 years or so. 

Using the pension wrapper and the ISA wrapper does result in diversification.   The only benefit for the ISA is the earlier accessibility.

You should look to move the ISA to the pension as you get closer to 58.

Thanks for clarifying the Vanguard LifeStrategy product, I didn’t realise it could be taken outside of an ISA wrapper. Why would you want it outside of an isa though as won’t this leave it exposed to tax in future years? Possibly not so much of an issue with the small amount I will be paying but still. 

The other wrappers or unwrapped are unlikely to be an issue for you.  However, they are for larger investors.

How do you specify if you want the product in an ISA or not?

The ISA is the product.    You open the ISA and choose the investments within it.

CheekyMikey

Given your age and timeframe, I’d personally be going 100% equities for five years before considering introducing safer options into my portfolio, but all depends on your appetite for risk..

Albermarle

You do not mention how your pension is invested ?

Or is it a Defined Benefit/final salary type  scheme ( typical in the public but not private sector )

sebtomato

reck_uk said:

I’d like to start saving some money outside of my pension for retirement to give me some cover for emergencies and bigger purchases. 

I’m 46 and would be looking to pay in around £100 a month over the next 10 - 15 years (hopefully).

I was looking at a Vanguard LifeStrategy 80% equity fund as a possible option, what are your views on that? Also just for confirmation, is the Vanguard LifeStrategy just their name for a S&S ISA?

If not Vanguard what other options would you suggest I look at for my scenario?

Thanks

I have been investing in my pensions for a while, but also have some investments outside too, for the very same reason as you: to possibly retire before I can get money from my pensions.

I think Vanguard LifeStrategy (VLS) is a good balanced fund to have in an ISA or outside an ISA (General Investment Account), and quite cheap too in term of fees (0.22%).

However, if you don't think you will need to use the money for 5+ years, you may want to go for the riskier VLS100 rather than the VLS80.

Also note the VLS funds are quite weighted towards the UK, which may or may not be favourable.

reck_uk

Thanks for your input everyone, seems putting some money into this isn’t a bad idea.