Pension Fund Advice

CLarner

Hi, 

I have a small pension fund (around £27k) and they have recently written to me stating that the fund I have invested in is now defunct and that I need to choose new funds by 11.09.23. If I don't choose myself they will choose an investment similar to that which I already have. I could do with some advice as I forgive my ignorance but I really don't understand pensions at all! I also don't want to get embroiled with companies who may not be reputable for advice.

I am currently invested in 2 funds as follows:

Aegon Blackrock Dynamic Div Growth - AMC 0.55
Aegon Blackrock 30/70 Hgd Glob Eq Idx - AMC 0.27

My pension scheme have sent me a list of possible investment funds, some of which are more ethical/environmentally sound which is ideally where I would like to invest. The funds being offered are:

Aegon Blackrock Life path (Flexi/Capital Recruitment) - AMC 0.31, AE 0.00
Aegon Global Sustainable Multi-Asset Balanced (AMT)  - AMC 0.35, AE 0.02
Aegon Global Sustainable Multi-Asset Growth (AMT)  - AMC 0.80, AE 0.10
Aegon Retirement Income Multi-Asset (AMT)  - AMC 0.31, AE 0.00
Aegon Developed Markets Equity Tracker (AMT)  - AMC 0.30, AE 0.00
Aegon Global Climate Focus Equity (AMT)  - AMC 0.80, AE 0.15
Aegon Global Listed Infrastructure (AMT)  - AMC 0.85, AE 0.00
Aegon Global Short Term Sustainable Bond (AMT) - AMC 0.40, AE 0.03
Aegon Global Small Cap Equity Tracker (AMT)  - AMC 0.35, AE 0.01
Aegon Global Sustainable Equity (AMT)  - AMC 0.70, AE 0.03
Aegon Emerging Markets Equity Tracker (AMT)  - AMC 0.30, AE 0.07
Aegon UK Equity Tracker (AMT)  - AMC 0.31, AE 0.00
Aegon Global Absolute Return Bond (AMT)  - AMC 0.31, AE 0.00
Aegon Global Sustainable Government Bond (AMT)  - AMC 0.42, AE 0.09
Aegon UK Corporate Bond Tracker (AMT)  - AMC 0.25, AE 0.01
Aegon UK Government Bond Tracker (AMT)  - AMC 0.28, AE 0.01
Aegon UK Index-Linked Government Bond Tracker (AMT)  - AMC 0.25, AE 0.01
Aegon Cash (AMT)  - AMC 0.18, AE 0.00
Aegon UK Property (AMT)  - AMC 0.46, AE 0.68

For ease AMC is Annual Management Charge and AE is Additional Expense.

Could anyone advise the best place to go for pension advice? Or does anyone on here have any knowledge of which would be the best funds to go for and which percentages (totalling 100)? Or am I just better leaving it and allowing my pension fund to choose on my behalf?

Many thanks in advance.

Marcon

CLarner said:

Hi, 

I have a small pension fund (around £27k) and they have recently written to me stating that the fund I have invested in is now defunct and that I need to choose new funds by 11.09.23. If I don't choose myself they will choose an investment similar to that which I already have. I could do with some advice as I forgive my ignorance but I really don't understand pensions at all! I also don't want to get embroiled with companies who may not be reputable for advice.

I am currently invested in 2 funds as follows:

Aegon Blackrock Dynamic Div Growth - AMC 0.55
Aegon Blackrock 30/70 Hgd Glob Eq Idx - AMC 0.27

My pension scheme have sent me a list of possible investment funds, some of which are more ethical/environmentally sound which is ideally where I would like to invest. The funds being offered are:

Aegon Blackrock Life path (Flexi/Capital Recruitment) - AMC 0.31, AE 0.00
Aegon Global Sustainable Multi-Asset Balanced (AMT)  - AMC 0.35, AE 0.02
Aegon Global Sustainable Multi-Asset Growth (AMT)  - AMC 0.80, AE 0.10
Aegon Retirement Income Multi-Asset (AMT)  - AMC 0.31, AE 0.00
Aegon Developed Markets Equity Tracker (AMT)  - AMC 0.30, AE 0.00
Aegon Global Climate Focus Equity (AMT)  - AMC 0.80, AE 0.15
Aegon Global Listed Infrastructure (AMT)  - AMC 0.85, AE 0.00
Aegon Global Short Term Sustainable Bond (AMT) - AMC 0.40, AE 0.03
Aegon Global Small Cap Equity Tracker (AMT)  - AMC 0.35, AE 0.01
Aegon Global Sustainable Equity (AMT)  - AMC 0.70, AE 0.03
Aegon Emerging Markets Equity Tracker (AMT)  - AMC 0.30, AE 0.07
Aegon UK Equity Tracker (AMT)  - AMC 0.31, AE 0.00
Aegon Global Absolute Return Bond (AMT)  - AMC 0.31, AE 0.00
Aegon Global Sustainable Government Bond (AMT)  - AMC 0.42, AE 0.09
Aegon UK Corporate Bond Tracker (AMT)  - AMC 0.25, AE 0.01
Aegon UK Government Bond Tracker (AMT)  - AMC 0.28, AE 0.01
Aegon UK Index-Linked Government Bond Tracker (AMT)  - AMC 0.25, AE 0.01
Aegon Cash (AMT)  - AMC 0.18, AE 0.00
Aegon UK Property (AMT)  - AMC 0.46, AE 0.68

For ease AMC is Annual Management Charge and AE is Additional Expense.

Could anyone advise the best place to go for pension advice? Or does anyone on here have any knowledge of which would be the best funds to go for and which percentages (totalling 100)? Or am I just better leaving it and allowing my pension fund to choose on my behalf?

Many thanks in advance.

If you were happy with your existing choice, why do you think you need something different now - or is this perhaps the first time you've given it any thought and you were just in the default option?

Your age could be an important factor - how old are you? When do you plan to retire, and how do you plan to access your pension funds - by buying an annuity, or taking in chunks as 'drawdown'?

Pat38493

As mentioned by Marcon it would be difficult for anyone to comment unless they know what your future plans with that fund are - in particular, how many years until you expect to start taking the money out of it and how would you be expecting to do that.

For a fund that small, you would probably be better to put those details here and do some reading up around the topic, since to get official advice you would have to pay an IFA which wouldn’t be worth it for such a small pot.  As a very rough guide, equity funds tend to give better long term returns (over 10-15 years) but are much more volatile over shorter periods so you may lose money in lesser timeframes.

Bond funds would be a middle ground (some growth but theoretically less volatility).

Cash would be the least risk, but then you have little to no protection against inflation.

These are long term rules of thumb which may not hold true in all years - for example in 2022 bonds suffered large losses, even more than equities, which is a very rare thing to happen (last time was over 100 years ago according to other posters here).

If you put the names of the funds into a search engine you will find factsheets on various sites like Morningstar which give you the basic details of each fund.

Albermarle

Could anyone advise the best place to go for pension advice?

The only person who can give you regulated personal advice is a qualified financial advisor. However normally they are not interested in clients with 'only' £27K in the fund.

I think around 95% with an invested pension, never choose their own investments and  the pension provider just puts the money in their default fund(s) . 

El_Torro

I am not familiar with Aegon funds, some things to consider though:

If you want an ethical fund then I'm not sure there are any funds on that list which are advertised as ethical. Bear in mind as well that your idea of what is ethical / unethical may differ from Aegon's. 

If you are more than 10 years from accessing your pension then 100% equities is not a bad idea. Just make sure you invest in a global fund, not UK specific, or developed world specific, or whatever. You will have to take into account that 100% equities is more volatile than a fund which also contains bonds. If you're going to fret about the changes in value every day and have sleepless nights over it that's not a good investment for you. 

One option would be to transfer this pension to another provider, for example one that does offer ethical funds. That may not be a straightforward thing to do if this is your employer's pension scheme.

CLarner

Thank you for the responses so far and apologies, for the lack of information given!

I am 47 and am hoping to retire at 65 but could be 67 depending on financial status. I will likely be taking this pension as a drawdown. 

The pension was with a former employer and was only paid into for a few years before I left the business hence the fund not being huge.

In terms of which funds were invested in, when I first signed up to this pension in 2002 my ex-husband's father gave me advice on what to invest in as he had previously worked in pensions. I have left it as it was for the last 21 years and this is the first time that I have actively been asked to switch funds, hence the confusion!

Hope that gives some clarity?

Marcon

CLarner said:

Thank you for the responses so far and apologies, for the lack of information given!

I am 47 and am hoping to retire at 65 but could be 67 depending on financial status. I will likely be taking this pension as a drawdown. 

The pension was with a former employer and was only paid into for a few years before I left the business hence the fund not being huge.

In terms of which funds were invested in, when I first signed up to this pension in 2002 my ex-husband's father gave me advice on what to invest in as he had previously worked in pensions. I have left it as it was for the last 21 years and this is the first time that I have actively been asked to switch funds, hence the confusion!

Hope that gives some clarity?

... at which time your only option would have been to buy an annuity (and take some as a tax free lump sum at that point if you wished to do so).

The landscape has changed considerably since then. Have you considered transferring it to your current scheme, assuming that accepts transfers?

Bostonerimus1

You won’t get advice here, but you will get opinions. To give our opinions we need to know your age and whether you are comfortable taking some risks with your money. As a rule of thumb I’d probably stick to a single multi asset type fund that owns an appropriate range of stocks and bonds. Also take this as an opportunity to learn about the funds you can buy. There should be information online.