How necessary is it to diversify couples retirement savings?

joeyboy

Hi folks, 

Just trying to help my partner make a decision but want to consider managing risk as a married couple.

We are both 32, no kids. Basic rate tax payers and likely will remain so based on careers. 

So I pay 8% into my employees NEST scheme. I then max out a LISA that is currently all invested in the HSBC ftse all world.

My partner does 10% into her works SS Scottish widows scheme. Doesn't want to do more at the moment and has savings account but wants to put some of what's left some months into longer term retirement, though not the full annual Lisa amount more just couple hundred here and there.

My main query is would it be foolish to have her copy my system of LISA and fund choice or is the index risk spread wide it doesn't matter that much? (as in if for some reason ftse all world did badly.. Everything probably has). 

Alternatively I could set her up with a different place (I use dodl by aj bell) say HL and something like fundsmith equity. I'm not that knowledgeable about funds but it would be some sort of global large cap fund at the moment.

tacpot12

Given the amounts involved and your ages, I don't think it would be foolish to copy your investments at this stage. If she were to start putting more significant amounts away in future, then it probably is worth choosing a different fund provider than HSBC. She (with your help if she wants it) to see if there is anything that is the equivalent to the HSBC FTSE All Share fund you have - I would be surprised if Fundsmith was as good on charges as the HSBC fund - charges are as important as investment performance.  

Using her works pension scheme is likely to be the best option for pensions saving, a LISA for saving to buy a home, and ISAs for long-term investments, e.g. to give her an early retirement option. A seperate personal pension would be the best option for pension saving once her works pension is maxed out, assuming she decides that she wants to save more for her retirement post age 57 retirement. 

I'm curious why you are using a LISA and not a Pension for your retirement saving. Have you read a good article on the differences between them, like this one: Should I get a pension or a Lifetime ISA? - Times Money Mentor (thetimes.co.uk)

joeyboy

Hi thanks for the reassurance! Yeah read several articles, incl some of the older ones which seem inconsistent. But after reading several it seems that if you will be a basic rate taxpayer in life and in retirement, a LISA is more advantageous as you get the same tax benefit (25% top up being same as 20% relief) but it isn't taxed at retirement. In all other situation's a SIPP wins but not in that scenario, or at least that's what those articles explain. Obviously if I become a higher rate taxpayer it will not be the case.

Hmm yeah I'll have to look at charges suppose it's the usual last 5 years isn't a forecast for the next.