Nest vs People's pension

d_pipa

Hi 

I've got a private pension SIPP in Vanguard Lifestrategy (best decision) however I need to sort my workplace pension as they are changing the pension provider and asked me if I want to move from Nest to People's Pension...

If I had a choice I wouldn't pick either but because it's my workplace's pension I need to decide. Which one would you pick?!

Marcon

d_pipa said:

Hi 

I've got a private pension SIPP in Vanguard Lifestrategy (best decision) however I need to sort my workplace pension as they are changing the pension provider and asked me if I want to move from Nest to People's Pension...

If I had a choice I wouldn't pick either but because it's my workplace's pension I need to decide. Which one would you pick?!

Given NEST's initial contribution charge of 1.8%, that's not a great incentive - especially if you are in the older age bracket.

Not sure why you're being given a choice. Surely it's for your employer to pick the provider?

penners324

Look at the charges and available funds for both. People's pension was more limited in the funds available last I looked at them.

BlackKnightMonty

Personally I have been quite happy with NEST. As soon as I joined I swapped into the Sharia fund. And past performance, blah blah, has been the best performing out of all the NEST funds.

Albermarle

BlackKnightMonty said:

Personally I have been quite happy with NEST. As soon as I joined I swapped into the Sharia fund. And past performance, blah blah, has been the best performing out of all the NEST funds.

Yes the performance has been very good, because it is highly concentrated in the US and the tech companies.
Maybe that will continue, or maybe not....

BlackKnightMonty

Albermarle said:

BlackKnightMonty said:

Personally I have been quite happy with NEST. As soon as I joined I swapped into the Sharia fund. And past performance, blah blah, has been the best performing out of all the NEST funds.

Yes the performance has been very good, because it is highly concentrated in the US and the tech companies.
Maybe that will continue, or maybe not....

Well the 13 years of NEST it’s performed the best.

But of course past performance blah blah.

dunstonh

BlackKnightMonty said:

Albermarle said:

BlackKnightMonty said:

Personally I have been quite happy with NEST. As soon as I joined I swapped into the Sharia fund. And past performance, blah blah, has been the best performing out of all the NEST funds.

Yes the performance has been very good, because it is highly concentrated in the US and the tech companies.
Maybe that will continue, or maybe not....

Well the 13 years of NEST it’s performed the best.

But of course past performance blah blah.

If it had existed in the 13 years prior to that, it would have been the worst with that asset makeup.

BlackKnightMonty

dunstonh said:

BlackKnightMonty said:

Albermarle said:

BlackKnightMonty said:

Personally I have been quite happy with NEST. As soon as I joined I swapped into the Sharia fund. And past performance, blah blah, has been the best performing out of all the NEST funds.

Yes the performance has been very good, because it is highly concentrated in the US and the tech companies.
Maybe that will continue, or maybe not....

Well the 13 years of NEST it’s performed the best.

But of course past performance blah blah.

If it had existed in the 13 years prior to that, it would have been the worst with that asset makeup.

As I said; fantastic performance.

https://markets.ft.com/data/funds/tearsheet/charts?s=GB00BFZNFH05:GBP

dunstonh

BlackKnightMonty said:

dunstonh said:

BlackKnightMonty said:

Albermarle said:

BlackKnightMonty said:

Personally I have been quite happy with NEST. As soon as I joined I swapped into the Sharia fund. And past performance, blah blah, has been the best performing out of all the NEST funds.

Yes the performance has been very good, because it is highly concentrated in the US and the tech companies.
Maybe that will continue, or maybe not....

Well the 13 years of NEST it’s performed the best.

But of course past performance blah blah.

If it had existed in the 13 years prior to that, it would have been the worst with that asset makeup.

As I said; fantastic performance.

https://markets.ft.com/data/funds/tearsheet/charts?s=GB00BFZNFH05:GBP

and as I said, the 13 years prior to that, it would have been awful performance.

BlackKnightMonty

dunstonh said:

BlackKnightMonty said:

dunstonh said:

BlackKnightMonty said:

Albermarle said:

BlackKnightMonty said:

Personally I have been quite happy with NEST. As soon as I joined I swapped into the Sharia fund. And past performance, blah blah, has been the best performing out of all the NEST funds.

Yes the performance has been very good, because it is highly concentrated in the US and the tech companies.
Maybe that will continue, or maybe not....

Well the 13 years of NEST it’s performed the best.

But of course past performance blah blah.

If it had existed in the 13 years prior to that, it would have been the worst with that asset makeup.

As I said; fantastic performance.

https://markets.ft.com/data/funds/tearsheet/charts?s=GB00BFZNFH05:GBP

and as I said, the 13 years prior to that, it would have been awful performance.

A great virtue of NEST is that you can switch funds, for free, in the space of a week. So quite easy to move to a low risk fund if the markets turn. Actually the sustainable fund looks quite good for a bear market.

dunstonh

A great virtue of NEST is that you can switch funds, for free, in the space of a week.

That is actually slow if that's the case.  A SIPP using direct assets (ETFs/ITs) is real time and OEICs/UTs are usually T+2.         Charging for switching funds would actually be rare nowadays (although direct assets often have a dealing charge - but not OEICs/UTs or pension funds)

So quite easy to move to a low risk fund if the markets turn. 

How do you know when the markets are going to turn?  Or are you saying that you would move out of them after it has dropped?



Take the chart above and tell us what point you would have pulled out?
Anything from March 2000 to December 2000 is within normal volatility.  So, its unlikely it would be between then.  You get a glimmer of hope in January 2001 that is a false dawn.  So, its likely it would be after that.

What about going back in again?   You see things improve after October 2001



But then it goes down again and a decade later you have barely made anything.  And you probably did worse by chasing returns.

The thing about risk is that it is fine when everything is going up.  Anything that can go up that quickly and by that much can go down that quickly and by just as much.

 Actually the sustainable fund looks quite good for a bear market.

Historically, sustainable funds underperform the general market the majority of the time.   They have the odd good year but mostly they don't.    That is why you often see the additional risk warning

Here is tech vs global:


and in monetary terms with £100k base


Are we in a bubble again? is tech going to revert to mean as it has before?  (red is global equity)

The thing is, nobody knows. Those people who piled in in the late 90s (usually after the big increases had already happened) destroyed their retirement plans.  

And just in case you say, just look how much bigger the growth is this time, remember that charting makes older events look smaller.  If we shorten the timescale to 15 years, you will see the growth in tech this time is actually about the same as it was last time.



Going tech heavy could change your life.   For the better or worse.