Advice re pension funds

trevjl

dont_use_vistaprint said:

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. 

I have taken two TFLS from mine and all it took was a phone call, then a few clicks online to confirm something and the cash was in the bank in about 4 or 5 days. No charge at all and i could take whatever I liked. It now shows my pension in two pots, accumulation and drawdown. I am charged 0.2%
Not sure how much easier it could be

dunstonh

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

Regular UFPLS.  Some of the S6 plans also don't support phased drawdown.

 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.

Which Aviva?
This plan is a GPPP offered by Aviva Life & Pensions.   Aviva have several alternative plans.   Some have full functionality (all drawdown options).

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. 

What you have isn't a platform pension.  Its a traditional personal pension.  The fund charges are built into the product charge (bundled).

 if it meets your objectives (i.e. drawdown method) and is under 0.3% p.a. then its fine.   If it doesnt meet your objectives and/or is over 0.3% then you have better alternatives available.

dont_use_vistaprint

dunstonh said:

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

Regular UFPLS.  Some of the S6 plans also don't support phased drawdown.

 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.

Which Aviva?
This plan is a GPPP offered by Aviva Life & Pensions.   Aviva have several alternative plans.   Some have full functionality (all drawdown options).

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. 

What you have isn't a platform pension.  Its a traditional personal pension.  The fund charges are built into the product charge (bundled).

 if it meets your objectives (i.e. drawdown method) and is under 0.3% p.a. then its fine.   If it doesnt meet your objectives and/or is over 0.3% then you have better alternatives available.

I’m pretty sure it does support Regular UFPLS because I asked about taking money out they stated I can take individual amounts each with a 25% tax free component or I could take a 25% tax free lump sum. I will double check though.hopefully they checked what pension I have with them before saying that ! 

Is phased drawdown is taking some pension whilst working part time ? I can’t find a clear definition online other than

“ Phased drawdown is a process where you withdraw from your pension gradually instead of all at once, usually while continuing to work at reduced hours”

what’s the alternative taking it all in one go ? My understanding is whether I work or not doesn’t impact my rights to access my money at 55 ? 

dont_use_vistaprint

trevjl said:

dont_use_vistaprint said:

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. 

I have taken two TFLS from mine and all it took was a phone call, then a few clicks online to confirm something and the cash was in the bank in about 4 or 5 days. No charge at all and i could take whatever I liked. It now shows my pension in two pots, accumulation and drawdown. I am charged 0.2%
Not sure how much easier it could be

Yes this is this it was described. I was told the amount in drawdown is invested in the same units still which doesn’t make sense, if it is then the amount would go up & down 

ali_bear

When it comes to taking flexible access drawdown you may find that you have to move your current pension into a SIPP, even if it is with the same provider (AVIVA) to be able to take the benefits in the way you wish to. Then the charging structure may change and then you'd be thinking about shopping around. 

With respect to lifestyle plans that are automated to move your fund into less volatile investments as you approach retirement age. I think these were more suited to the older style of pensions where everyone bought an annuity. Now that your money stays invested after you start withdrawing from it, there is less need to protect the value on retirement. But obviously there may still be value in doing that, depending on your plan e.g. taking the TFLS or indeed buying an annuity. 

dunstonh

I’m pretty sure it does support Regular UFPLS because I asked about taking money out they stated I can take individual amounts each with a 25% tax free component or I could take a 25% tax free lump sum. I will double check though.hopefully they checked what pension I have with them before saying that ! 

If that is the case, then its a new thing as I did one about 4 months ago where regular UFPLS was not available.

Is phased drawdown is taking some pension whilst working part time ?

It is when you don't use your whole 25% up front.  So, the fund will have part crystallised and part uncrystallsed.

what’s the alternative taking it all in one go ?

er... not taking it all in one go      e.g. Fund of £200,000.     25% TFC is £50k.    However, you only want £10k TFC.  So, you crystallised £40k and take £10k as tax free cash.   That is phasing.

Notepad_Phil

dont_use_vistaprint said:

dunstonh said:

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

Regular UFPLS.  Some of the S6 plans also don't support phased drawdown.

 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.

Which Aviva?
This plan is a GPPP offered by Aviva Life & Pensions.   Aviva have several alternative plans.   Some have full functionality (all drawdown options).

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. 

What you have isn't a platform pension.  Its a traditional personal pension.  The fund charges are built into the product charge (bundled).

 if it meets your objectives (i.e. drawdown method) and is under 0.3% p.a. then its fine.   If it doesnt meet your objectives and/or is over 0.3% then you have better alternatives available.

I’m pretty sure it does support Regular UFPLS because I asked about taking money out they stated I can take individual amounts each with a 25% tax free component or I could take a 25% tax free lump sum. I will double check though.hopefully they checked what pension I have with them before saying that ! 

...

I think what Aviva is talking about is the ability to request multiple UFPLS withdrawals, but each withdrawal has to he requested by you at whatever time you want it (e.g. you could make one request in February, then make another request in August, etc, etc). I think dustonh is talking about having the ability to put in one request that results in a series of UFPLS withdrawals to be made from that point on (e.g. you could ask for a UFPLS withdrawal to be paid out every month from then on without any further action needed to be done by you).

bjorn_toby_wilde

There is just a small  platform fee, no management fees and the funds do not have individual charges. 

Might be worth checking that because Aviva inconveniently don’t put all the details in one place on my version.  I can see fund charges of .21% and an AMC of .18% but on different documents and in different parts of the website.

dont_use_vistaprint

dont_use_vistaprint said:

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?

Thanks for all the feedback interesting stuff but I didn’t get much on the original question.

Can anyone help me understand where the recent growth is coming from within these  two funds and how to allocate more to the growth areas. 

Are there any websites where you can track these over the last week, month etc (all I can find is one day, 3,6,12 months, 3 & 5 year) and track performance of individual components within them 

thanks 

Linton

dont_use_vistaprint said:

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?

To answer your original question....

My assessment:

The growth fund appears to be designed for moderate growth from global equity somewhere between Vanguard Life Strategy 60 ahd 80. 

The consolidation fund seems to be mainly intended not to lose money probably for when you are near retirement and wanting to buy an annuity.  It is based on derivatives rather than simple equity or bond funds and so it is difficult to comment on what it is really invested in.

Overall your portfolio is around 40% equity which I think many on this forum would consider to be over-cautious for pension pot accumulation if you are intending to move to drawdown.  Even in drawdown the often advocated equity allocation is 60%.  

What you allocation in retirement should be is impossible to say without much more information on yout needs, other sources of income, and attitude to risk.  To get an appropriate and reliable proposal on fund chooice I suggest you talk to an IFA