Opinions on pension planning

Aylesbury_Duck

The other thing I'd appreciate some views on is the mix of the pensions we have, and whether I should be looking to make any changes in the coming years.  Putting aside the DB schemes, our DC schemes are these:

Me
DC1 Scottish Widows (deferred) £151k in the default managed fund, 0.75% mgmt fee
DC2 Aviva (deferred) £166k in UK equities (19%), global equities (69%) and the rest in with-profits and its bonuses. 1.00% mgmt fee.
SIPP £9k in Vanguard's target retirement 2040 fund. 0.39% mgmt fee.
Prudential AVC (active) £144k and adding £2k p.m.  0.65% mgmt fee. (45% in with-profits cash accumulation, 55% in global equities - all ongoing payments into global equities)

My wife
SIPP £67k in Vanguard's target retirement 2035 fund. 0.39% mgmt fee. - going to start adding to this
Prudential AVC (active) £62k and adding £1k p.m.  0.65% mgmt fee.  Ongoing payments into global equities.

The immediate thought is whether I might move either or both of my deferred DC pots to a provider with a lower management fee.  The Aviva plan has a current transfer value of £200k because of a final bonus.  I understand that the interim bonuses I've accumulated are safe, but that the final bonus isn't guaranteed.  Is there any mileage in transferring out now and cementing that bonus, rather than running the risk of the final bonus not being as good when I come to draw on the plan?  I assume that if left where it is, that final bonus may rise, of course.

In terms of risk appetite, it feels about right - there's perhaps more in equities than some would have when considering retirement in six years' time at 57, but with two reasonably decent LGPS pots and £380k of savings behind us we've got some secure retirement income to be able to leave DC money invested if it wasn't optimal to access it at the time, and over the coming years we can move towards less volatile funds.

My final question is one about professional advice.  Do you think we need it at this stage, is it something we should seek in a few years' time as we near possible early retirement, or is it not really needed for our situation?  I've learned a lot about pensions in the last couple of years from this forum (thank you) and now have a detailed spreadsheet that gives me some good planning tools for the use of our pensions and savings, but recognise I will miss things.

Albermarle

 The Aviva plan has a current transfer value of £200k because of a final bonus.  I understand that the interim bonuses I've accumulated are safe, but that the final bonus isn't guaranteed.  Is there any mileage in transferring out now and cementing that bonus, rather than running the risk of the final bonus not being as good when I come to draw on the plan?  I assume that if left where it is, that final bonus may rise, of course.

AIUI, the final bonus for the with profits fund, is only guaranteed to be paid when you reach the designated retirement date of the fund ( 65 I guess).
If you transfer out before, it is possible it will be reduced by a MVR ( market value reduction). These are usually employed temporarily, in times of market stress. ( although they can last years during a prolonged slump)
I think normally the final bonus is paid in full when you transfer, unless there has been a big market drop in the preceding months.

My final question is one about professional advice.  Do you think we need it at this stage, is it something we should seek in a few years' time as we near possible early retirement, or is it not really needed for our situation?  I've learned a lot about pensions in the last couple of years from this forum

As a regular reader of the forum, you will know this question has been asked/debated many times, and that there is no easy answer. It is your decision.
You sound pretty confident to DIY, so probably you do not need an advisor as such, but they could still maybe add value ( or subtract from it due to their fees !)
Caveat being that the rest of your life is not particularly complicated regarding family situation, other income, taxes etc . The more complex your affairs the more professional advice from advisors, tax accountants, solicitors etc becomes necessary.

Aylesbury_Duck

Albermarle said:

 The Aviva plan has a current transfer value of £200k because of a final bonus.  I understand that the interim bonuses I've accumulated are safe, but that the final bonus isn't guaranteed.  Is there any mileage in transferring out now and cementing that bonus, rather than running the risk of the final bonus not being as good when I come to draw on the plan?  I assume that if left where it is, that final bonus may rise, of course.

AIUI, the final bonus for the with profits fund, is only guaranteed to be paid when you reach the designated retirement date of the fund ( 65 I guess).
If you transfer out before, it is possible it will be reduced by a MVR ( market value reduction). These are usually employed temporarily, in times of market stress. ( although they can last years during a prolonged slump)
I think normally the final bonus is paid in full when you transfer, unless there has been a big market drop in the preceding months.

My final question is one about professional advice.  Do you think we need it at this stage, is it something we should seek in a few years' time as we near possible early retirement, or is it not really needed for our situation?  I've learned a lot about pensions in the last couple of years from this forum

As a regular reader of the forum, you will know this question has been asked/debated many times, and that there is no easy answer. It is your decision.
You sound pretty confident to DIY, so probably you do not need an advisor as such, but they could still maybe add value ( or subtract from it due to their fees !)
Caveat being that the rest of your life is not particularly complicated regarding family situation, other income, taxes etc . The more complex your affairs the more professional advice from advisors, tax accountants, solicitors etc becomes necessary.

Thank you.  I will do some more policy reading around the bonus element.

Thankfully, my financial affairs are not particularly complicated.  No other sources of income, no CGT to worry about, nothing complicated on the family front.  I'll continue to DIY and reassess the situation in a couple of years as we get closer to potential early retirement.