Advice re pension funds

dont_use_vistaprint

I have an Aviva life strategy pension that I wish to start drawing down from in about one year when I am 55.

It’s currently invested in two funds

58% My future focus growth S6
https://markets.ft.com/data/funds/tearsheet/summary?s=GB00B4W9CK61:GBP

42% My future focus consolidation pre 2024 S6

https://markets.ft.com/data/funds/tearsheet/summary?s=GB00B98Z7V97:GBP

The choice of funds is the way that it is because I have artificially set my retirement age to 67 so that it focuses more on growth.

it’s currently worth just over £300,000 and fees are low. I paid into this pension for around 2.5  years, it never seemed to make any money but the tax relief and employer contributions were extremely generous so it made sense to. I’ve not paid in anything for the last two years and it seems to be growing nicely now.

When I look more closely, it seems that the growth units are the ones doing all the work.

I don’t understand what the two different funds are meant to do? Is the consolidation meant to be safer but grow more slow slowly because it has a lower risk rating? But based on its performance, this doesn’t look the case.

if you were looking to start drawing down
in a year from this, what changes would you make if any?

trevjl

Cant comment on your funds but I am with Aviva also. I moved from my company lifestyle default a few years ago to their drawdown focus and as you, put my NRA as 67 but finished just before my 62nd last year.
It seems to be going along very nicely. I took £15K TFLS when i finished and within less than 3 months it had gone back past what it was before I took it

bjorn_toby_wilde

I have an Aviva pension in very similar funds. Mine don’t have the word Focus in the title if that makes a difference. The risk level on the two is 4 for the growth and 3 for the consolidation.

Rather than change the retirement date I turned off the lifestyling some time ago so my mix is 66% growth, 34% consolidation.

Have you checked the asset mix of the combination on the Aviva website?  Mine shows overall 55% equity and 43% bonds and gilts. I’m not qualified to say what the right mix would be for drawdown but one extra thing to consider would be the costs of drawdown. Some providers charge more than others for this. There’s a comparison table on Which I believe. I think Aviva are middle of the road but I plan to check and possibly move mine at that point.

Edit- link to Which comparison here https://www.which.co.uk/money/pensions-and-retirement/options-for-cashing-in-your-pensions/pension-income-drawdown/compare-pension-drawdown-plans-and-charges-aMxXo0o2dHBV#pension-drawdown-charges-in-detail

Hoenir

dont_use_vistaprint said:

if you were looking to start drawing down
in a year from this, what changes would you make if any?

That depends entirely on what your expectations are. 55 is a relatively young age. You need to ensure that you've the financial resources to potentially survive the ups and downs of the markets for several decades. 

dont_use_vistaprint

Hoenir said:

dont_use_vistaprint said:

if you were looking to start drawing down
in a year from this, what changes would you make if any?

That depends entirely on what your expectations are. 55 is a relatively young age. You need to ensure that you've the financial resources to potentially survive the ups and downs of the markets for several decades. 

I will have a state pension at 67 and a LGBS pension available from 55+ I have a lot of savings so my expectations would be to continue growing this pot with medium risk while markets are good for 2-3 more years maybe 5

dont_use_vistaprint

bjorn_toby_wilde said:

I have an Aviva pension in very similar funds. Mine don’t have the word Focus in the title if that makes a difference. The risk level on the two is 4 for the growth and 3 for the consolidation.

Rather than change the retirement date I turned off the lifestyling some time ago so my mix is 66% growth, 34% consolidation.

Have you checked the asset mix of the combination on the Aviva website?  Mine shows overall 55% equity and 43% bonds and gilts. I’m not qualified to say what the right mix would be for drawdown but one extra thing to consider would be the costs of drawdown. Some providers charge more than others for this. There’s a comparison table on Which I believe. I think Aviva are middle of the road but I plan to check and possibly move mine at that point.

Edit- link to Which comparison here https://www.which.co.uk/money/pensions-and-retirement/options-for-cashing-in-your-pensions/pension-income-drawdown/compare-pension-drawdown-plans-and-charges-aMxXo0o2dHBV#pension-drawdown-charges-in-detail

Thanks this is something I need to look into more detail because when I spoke to them on the web chat they said there is absolutely no charges whatsoever for taking money from the pension, the only charges are the platform  management fee which is based on the fund size and very reasonable.

I wonder if it makes a difference between this being a company pension rather than  a SIPP ?

update: I just checked the information at the link and it confirms there are no charges for drawdown from Aviva

dunstonh

When I look more closely, it seems that the growth units are the ones doing all the work.

If you split asset types into growth and defensive, then over most periods, the growth assets will outperform the defensive.     Only in negative markets will the defensive usually do better.

We have had a particularly bad period for defensive assets.   Bonds have been in decline since Dec 2021.  Gilts funds, in particular have had their worst period in over 100 years.

Many people have seen losses between Dec 2021 and 2023 that mirrored a typical loss period on the stockmarket.   

I don’t understand what the two different funds are meant to do? Is the consolidation meant to be safer but grow more slow slowly because it has a lower risk rating? But based on its performance, this doesn’t look the case.

Funds perform in line with expectations 95% of the time.    Some Gilts/bonds have had one of those periods that falls in the 5%.     

However, you shouldn't let short term performance dictate what you do for the long term.   Despite bonds basically making nothing over the last 7 years (moved up and then down again to where they were 7 years ago) they have still done better than cash over the last 12 years.

Defensive assets exist because most people cannot handle a large stockmarket crash. 

if you were looking to start drawing down
in a year from this, what changes would you make if any?

Obviously, I wouldn't have that Aviva pension.  a) its doesn't support all drawdown options and the methods we most commonly use are not supported on that pension (S6 along with My future focus lets us know what pension type it is).  b) the fund selection is too limited  c) Alternatives are usually cheaper, unless its very very heavily discounted.

bjorn_toby_wilde

dont_use_vistaprint said:

bjorn_toby_wilde said:

I have an Aviva pension in very similar funds. Mine don’t have the word Focus in the title if that makes a difference. The risk level on the two is 4 for the growth and 3 for the consolidation.

Rather than change the retirement date I turned off the lifestyling some time ago so my mix is 66% growth, 34% consolidation.

Have you checked the asset mix of the combination on the Aviva website?  Mine shows overall 55% equity and 43% bonds and gilts. I’m not qualified to say what the right mix would be for drawdown but one extra thing to consider would be the costs of drawdown. Some providers charge more than others for this. There’s a comparison table on Which I believe. I think Aviva are middle of the road but I plan to check and possibly move mine at that point.

Edit- link to Which comparison here https://www.which.co.uk/money/pensions-and-retirement/options-for-cashing-in-your-pensions/pension-income-drawdown/compare-pension-drawdown-plans-and-charges-aMxXo0o2dHBV#pension-drawdown-charges-in-detail

Thanks this is something I need to look into more detail because when I spoke to them on the web chat they said there is absolutely no charges whatsoever for taking money from the pension, the only charges are the platform  management fee which is based on the fund size and very reasonable.

I wonder if it makes a difference between this being a company pension rather than  a SIPP ?

That may well be right. Your earlier post prompted me to check that Which table and the charges don’t reflect what I’m paying. The platform fees on there are much higher.

cfw1994

Per your title: be aware that nobody here will give you ‘advice’ - a term with regulated meaning in the pension world 😉
Guidance, banter, nonsense is about all you can hope for 🫣

Also with Aviva here 👍
I kind of agree with the Lars Kroijer philosophy on investing.  Spend 20 minutes there watching his videos to see that, but my summary: invest in “the world” at the lowest cost possible 🤷‍♂️
Always welcome any opinions or thoughts on that approach, always open to ideas here 🍻

So my funds are mostly with the low cost Aviva Global Equity fund.  A smaller chunk with their North American fund - after a career in US Tech, I still have some belief the sector will continue to do well for the foreseeable.  Both have done very well the past few years (which of course suggests to me this year will flatten or drop, but who know what will happen after the change of guard next week) 👀

Every now & then I take an hour or two to skim down the funds available to consider some movements, but for now, that’s where my DC pot lives.
FWIW, I also believe in having some cash assets to try to ride out any major crash.  Premium Bonds & fixed rate savings for that 👍

dont_use_vistaprint

dunstonh said:

When I look more closely, it seems that the growth units are the ones doing all the work.

If you split asset types into growth and defensive, then over most periods, the growth assets will outperform the defensive.     Only in negative markets will the defensive usually do better.

We have had a particularly bad period for defensive assets.   Bonds have been in decline since Dec 2021.  Gilts funds, in particular have had their worst period in over 100 years.

Many people have seen losses between Dec 2021 and 2023 that mirrored a typical loss period on the stockmarket.   

I don’t understand what the two different funds are meant to do? Is the consolidation meant to be safer but grow more slow slowly because it has a lower risk rating? But based on its performance, this doesn’t look the case.

Funds perform in line with expectations 95% of the time.    Some Gilts/bonds have had one of those periods that falls in the 5%.     

However, you shouldn't let short term performance dictate what you do for the long term.   Despite bonds basically making nothing over the last 7 years (moved up and then down again to where they were 7 years ago) they have still done better than cash over the last 12 years.

Defensive assets exist because most people cannot handle a large stockmarket crash. 

if you were looking to start drawing down
in a year from this, what changes would you make if any?

Obviously, I wouldn't have that Aviva pension.  a) its doesn't support all drawdown options and the methods we most commonly use are not supported on that pension (S6 along with My future focus lets us know what pension type it is).  b) the fund selection is too limited  c) Alternatives are usually cheaper, unless its very very heavily discounted.

Which drawdown options methods are not supported? When I spoke to them they said I can take out whatever I want whenever I want free- of -charge

 I posted a while back before consolidating my pensions. I got some really advice on here about comparing fees and features and did my research and Aviva came out the clear winner so I’m interested in your input on what drawdown features may be missing.

Fund choice I am happy with it’s performed well above my expectations in the last couple of years. Yes it must be heavily discounted. There is just a small  platform fee, no management fees and the funds do not have individual charges. 

AlanP_2

I wouldn't concern myself about what they don't support but focus on do they support what I want?

If the answer is yes, then who cares about what they don't support.

If the answer is no , then who cares what they don't support as you will need to move it anyway.