more SIPP dilemmas

Voyager2002

You are confounding various different questions: what sort of pension provision; and what investments to make within that.

The first question is relatively easy: you mentioned a SIPP. (There are other vehicles for a pension although I don't know about them, but a SIPP is relatively straightforward.) You have a choice of providers, but you really do need to crack on and open an account with one of them, and put your money for this tax year into that account. The decision about what investments to buy with that money is less urgent.

I looked at various SIPPs and eventually opened one with Fidelity, and I am reasonably satisfied. Be aware of charges, and also of the choice of investments offered within a particular SIPP. The decision is not irrevocable since transferring from one provider to another is fairly straightforward.

As for the choice of investments, I suggest something simple like a global tracker.

Albermarle

Voyager2002 said:

You are confounding various different questions: what sort of pension provision; and what investments to make within that.

The first question is relatively easy: you mentioned a SIPP. (There are other vehicles for a pension although I don't know about them, but a SIPP is relatively straightforward.) You have a choice of providers, but you really do need to crack on and open an account with one of them, and put your money for this tax year into that account. The decision about what investments to buy with that money is less urgent.

I looked at various SIPPs and eventually opened one with Fidelity, and I am reasonably satisfied. Be aware of charges, and also of the choice of investments offered within a particular SIPP. The decision is not irrevocable since transferring from one provider to another is fairly straightforward.

As for the choice of investments, I suggest something simple like a global tracker.

To confirm the above . I have a large SIPP and two small SIPP's ( Fidelity. HL & AJ Bell) and two ex employer pensions ( Standard Life and Scottish Widows) . Of the 5 , I would only have some negative thoughts about SW. The others are all fine.

penners324

Get an account open, get money into it, then think about where it's invested.

Penfold or PensionBee would be easy to get set up (there are others as well)

GeoffTF

dunstonh said:

Figure 2 shows clearly how Target Retirement Funds work. Some people trust Vanguard's research. Others take advice from anonymous posters on the Internet with nothing better to do (like us). Nobody knows what will work out best, but Vanguard's plan is at least a reasonable one.

Vanguards TR funds reduce the equity ratio by computer whether it is a good time to do so or not.  There is no discretion involved.

Typically, you find that if drawdown is planned and the person is 80%+ equities retirement, then then normally only drop back to around 60%.   If they are already at 60% pre-retirement then most continue on that basis.       

There is a lot of risk using VTR and not understanding how it works and its negatives but there is also a lot of risk investing above your investor behaviour tolerance and capacity for loss.

These funds are one size fits all. They are aimed at people who have no knowledge of investing and cannot afford an adviser. Not surprisingly they are conservative. People can change to another fund at a later stage if they wish.

martin7575

thanks @ColdIron hit the nail on the the head there have definitely struggled with the available options. thanks for the links ill take a look now

on your advice as to objective, I think thats my issue, probably not clearly that clearly formulated beyond, start putting something away that performs reasonably after fees and is balanced in terms of risk. most platforms would offer something that fits that  

martin7575

@artyboy

Part of the problem here is that, aside from wanting to get some tax efficiency out of company funds, it's not clear what your investing objective actually is. You've bounced around from SJP (barge pole...) to a very specific set of funds within the Vanguard range (unless you're planning on buying an annuity at a specific date, why would you want one of their target funds?), and then to an IFA - which may actually be a good investment if you're not sure what you actually want here, or what your attitude to risk is.

Re vanguard target funds, probably because  in my discussion with sjp, they discussed de risking closer to retirement and  just seemed practical so that its less likely to lose value at that point. As i say in the post though advice i had on an earlier thread educated me  a little on why that might not be a good idea.

im not trying to beat the market, just to have some tax effieciencies and try to preserve the value of the cash ive earned

For me, I just stick the vast majority in HMWO or a similar global equity fund. My risk tolerance is high as I expect to be invested for the rest of my life and beyond, plus I'm not trying to beat the market. Maybe that's your outlook as well, maybe not...

martin7575

@ColdIron also i would consider an IFA but  I don't know anyone who has used one so no personal recommendations and have been told that  the low numbers would put most off so seemed a minefield.

Also the funds shown to me by sjp (although not independent)  seemed to perform similarly or worse than other vanguard or aj bell funds

hewhohuntselves

Albermarle said:

LHW99 said:

GeoffTF said:

artyboy said:

...to a very specific set of funds within the Vanguard range (unless you're planning on buying an annuity at a specific date, why would you want one of their target funds?),

Vanguard's Target Retirement Funds are aimed primarily at people who want to go into drawdown, rather than buy an annuity. (There are no index linked annuities in the US, where target date funds are very popular.) These funds gradually reduce the equity percentage both before and after retirement. The attraction of these funds is that you only have to decide on your likely retirement date and leave the rest to Vanguard. (In contrast, life-styling reduces the equity percentage to zero before retirement, to hedge against changes in annuity prices.)

I would have said the opposite - Llifestyling is intended to ensure that the fund becomes less sensitive to equity volatility closer to the date you want an annuity (hence people wanting to turn it off). Annuity rates I believe are related to bond yields, so that if bonds go down in actual value, you turn them into an annuity of much the same income level as before the dip.

If you want to drawdown, you don't want too much equity turned into bonds,as you need the likely long term growth that equities are more likely to provide (as you would remain invested over 20-30 years (hopefully)

It used to be that most traditional pension providers lifestyle funds were aimed at someone buying annuity, so reduced the equity % to zero or close in the last year or two before retirement.
Nowadays you are usually offered a choice of lifestyle options e.g. Annuity; long drawdown; short drawdown etc and the drawdown one is now often the default.
Although it seems from a few posts on here last year, some people are still in the wrong one.

However even with the drawdown ones, they seem to tend to reduce equity further than is probably ideal ( opinions vary ) 

My Aviva target drawdown will go to 50/50 on current plans.  It’s a little low, but my other investments will hopefully balance it out (or, if not, I can obviously change it).  I’m relaxed about it.  I don’t think I would want more than 65% equities in retirement.

martin7575

@GeoffTF

These funds are one size fits all. They are aimed at people who have no knowledge of investing and cannot afford an adviser. Not surprisingly they are conservative. People can change to another fund at a later stage if they wish.

sounds like me...good to know changes are possible.

 I could probably afford an adviser but apart from feeling like its a bit of a minefield finding someone good , im not convinced that returns would be much better from what ive seen and with the impact of fees and articles like the below it makes me think twice. That said if I found someone who I trusted and could and did more than put my money in similar generic funds like the ones you mention and the ones sjp had me consider.

https://www.listenmoneymatters.com/the-scariest-1-the-impact-of-fees-in-the-long-term/

martin7575

@albemarle can i ask why you have multiple sipps providers? could you not have taken different funds through the same platform or was it the availability if specific funds.

onee other thing is that ive seen conflicting info about how much i can invest,as its my first year can i still invest 60k or do i have to max at last years profit (41k)