ready made pension advice

jimboger1

hi all
turned 60 last week and plan to retire in 12 months 
my pension currently site with Scottish Widows an £320k and over the next 12 months that will increase to around £400k due to salary sacrifice & bonus etc

just now realised that my SW pension hasn't been performing very well and I feel I'd like to move it now (the £320k) into something that will hopefully perform a little better 

now I understand there are no guarantees, but by looking at things like Pension Bee, Moneyfarm, Nutmeg, etc, they seem to provide some decent packages, with past performance that is better than what I've had from SW

ideally I'd like to get around 5% to 6% nett return 

any advice greatly appreciated 

Jim

Nick9967

Not advice, but have some experience with SW, other than getting an IFA involved, you can change what portfolios you are invested in with SW , i have most of mine with them and manage most online now, i couldn't be further from a knowledgeable investor but basing my choices on a mixture of - lots of insight form the guys and girls on here, some basic common sense, some historical info on the funds themselves, understanding your own view on risk/reward type evaluation and a massive spread sheet i keep working on! then you can choose! i get way more than 5/6% most of the time and like i say i don't have a clue in reality - i simply mix it round the world to spread the risk in equities, a few bits of bonds , very little cash or property cos to me they never seem to actually make me any money (probably lose overall) in fact SW have portfolios that tell you more or less the mix within each - with that and a very very basic understanding of what will likely grow over time and likely wont much you'll get a simplistic idea, at least that's my opinion!

Linton

Performance is primarily due to the fund(s) you have chosen rather than who is administering the pension.

If you let us know the name of the fund(s) we can comment on why the performance is what it is.  It may be that you have been invested in an overly cautious fund for example.

Only a few funds are likely to give you a steady 5-6% per year.  WIth others some years could be much higher and others much lower.

If you are to retire in 12 months time you may not wish to be invested in a higher risk/higher return fund since you could well end up retiring with less money than you have now.

dunstonh

just now realised that my SW pension hasn't been performing very well and I feel I'd like to move it now (the £320k) into something that will hopefully perform a little better 

Its not the pension that performs.  It is the funds you select.  If you have gone heavy in bonds, then performance would have been negative to non-existent since 2022.  If you have gone heavy in equities, it should be nicely positive.

now I understand there are no guarantees, but by looking at things like Pension Bee, Moneyfarm, Nutmeg, etc, they seem to provide some decent packages, with past performance that is better than what I've had from SW

They offer the same style of packaged portfolios as SW.    So, make sure you are comparing on a like-for-like basis.  i.e. not comparing a bonds heavy portfolio with an equities heavy portfolio.   

ideally I'd like to get around 5% to 6% nett return 

So, that means you are likely looking at the higher end of the risk scale.  Is the SW pension invested in that way, or is it more at the defensive end of the risk scale?

DRS1

You also need to think about what you will do with the pension when you retire.  Are you going to buy an annuity?  Or go into some form of drawdown.

Does your SW pension support drawdown?

Oh and is it in a with profits policy with any bells and whistles like a GAR?  If so tinkering with all or part of it may be unwise.

SVaz

If you’re retiring in a year,  presumably you’ve moved a fair chunk into cash / cashlike funds or bonds ( if buying an annuity) already?  Or are you leaving this year’s contributions in cash ready to draw for a few years? 

That’s more important than fund performance. 

jimboger1

SVaz said:

If you’re retiring in a year,  presumably you’ve moved a fair chunk into cash / cashlike funds or bonds ( if buying an annuity) already?  Or are you leaving this year’s contributions in cash ready to draw for a few years? 

That’s more important than fund performance. 

tbh, I've only just started looking at my pension, so clueless tbh - I was however going down the flexi drawdown route as opposed to an annuity 

gm0

 OK - welcome to the forum

Round these parts - we favour  EITHER independent advice - for people who understand the cost (vs time to be invested to learn and to DIY) or DIY.  We tend to take a dim view from a moneysaving angle of expensive platforms, funds and advice.  So IFA not FA  / Wealth manager branding.

Over the deaccumulation life of a 40 year pension 60-100.  Advice will cost 10-12% of the intial pot.   For you that's 40k.  So this is not a cheap service.  A wealth manager might easily double the ongoing fees from 0.5% pa to 1% pa or more.  And charge more upfront.  Their product may also be more expensive than an IFA one, or readily available DIY options.

Another forum favourite is to AVOID - wealth managers - FAs.  SJP. Quilter. Investec. etc. etc. Tied products (expensive) with expensive versions of advice attached.   First question to any prospective adviser you look at or find - is about independence and what products they sell

All advisers - the bad and the good the expensive and the cheap - are tied to FCA regulations for how advice is delivered on choosing a pension product for an individual  This is called "suitability".  And the deliverables they produce are quite prescriptive.  There is not a lot of variability - and you would not expect a wide range of prices. But here we are. 

You can drive a coach and horses through these rules.  The same deliverables will be produced.  But the adviser will find a way to justify switching to their recommended investments and taking you into their ongoing advice nest - with it's 0.5% to >1% annual fee.  Under a contract which promises nothing at all in terms of investment outcomes.  So the key message is BEWARE of people who want to help you by first taking a large drink from your pension pot.

Be sure of what you want by way of advice.  And understand market price for it.

jimboger1

the pension is SW Pension Portfolio 4 CS8

jimboger1

Linton said:

Performance is primarily due to the fund(s) you have chosen rather than who is administering the pension.

If you let us know the name of the fund(s) we can comment on why the performance is what it is.  It may be that you have been invested in an overly cautious fund for example.

Only a few funds are likely to give you a steady 5-6% per year.  WIth others some years could be much higher and others much lower.

If you are to retire in 12 months time you may not wish to be invested in a higher risk/higher return fund since you could well end up retiring with less money than you have now.

understood

jimboger1

gm0 said:

 OK - welcome to the forum

Round these parts - we favour  EITHER independent advice - for people who understand the cost (vs time to be invested to learn and to DIY) or DIY.  We tend to take a dim view from a moneysaving angle of expensive platforms, funds and advice.  So IFA not FA  / Wealth manager branding.

Over the deaccumulation life of a 40 year pension 60-100.  Advice will cost 10-12% of the intial pot.   For you that's 40k.  So this is not a cheap service.  A wealth manager might easily double the ongoing fees from 0.5% pa to 1% pa or more.  And charge more upfront.  Their product may also be more expensive than an IFA one, or readily available DIY options.

Another forum favourite is to AVOID - wealth managers - FAs.  SJP. Quilter. Investec. etc. etc. Tied products (expensive) with expensive versions of advice attached.   First question to any prospective adviser you look at or find - is about independence and what products they sell

All advisers - the bad and the good the expensive and the cheap - are tied to FCA regulations for how advice is delivered on choosing a pension product for an individual  This is called "suitability".  And the deliverables they produce are quite prescriptive.  There is not a lot of variability - and you would not expect a wide range of prices. But here we are. 

You can drive a coach and horses through these rules.  The same deliverables will be produced.  But the adviser will find a way to justify switching to their recommended investments and taking you into their ongoing advice nest - with it's 0.5% to >1% annual fee.  Under a contract which promises nothing at all in terms of investment outcomes.  So the key message is BEWARE of people who want to help you by first taking a large drink from your pension pot.

Be sure of what you want by way of advice.  And understand market price for it.

yes I realise there are plenty vultures out there