NEST and People's Pension - no UK option

taking_stock

I've looked through both NEST and The People's Pension and can't find anywhere the option for a UK tracker or UK investment option.  Am i missing something, surely this should be an option?  The reason for looking is that the Global funds option is obviously very heavily weighted to the US, and particularly to a small number of high cap ones (Mag 7). 

Marcon

taking_stock said:

I've looked through both NEST and The People's Pension and can't find anywhere the option for a UK tracker or UK investment option.  Am i missing something, surely this should be an option?  

Both schemes offer limited investment options and what you're looking for quite simply isn't one of them. If you're looking at opening a pension for yourself, then all you need to do is pick a different provider - clearly not an option (or at least not immediately) if they are your employer's choice of auto-enrolment scheme. There's usually nothing to stop you transferring out of either scheme at some point if you especially want that particular choice of fund. 

Albermarle

 surely this should be an option?  

They limit the range available as in fact the demand is low. Something like 95% of customers never move out of the default fund.

taking_stock

yeah, i guess it's the difficulty of getting (most) people to take an active interest in their own pension savings   

LHW99

Is this likely to change if it is decided that pension schemes should be encouraged to always have a certain proportion of UK listed holdings?

Rich1976

taking_stock said:

yeah, i guess it's the difficulty of getting (most) people to take an active interest in their own pension savings   

Not necessarily. In some instances the default fund could well be better than if they selected their own fund . It helps low knowledge customers avoid making mistakes in selecting something not suitable for their circumstances .

taking_stock

while googling, i'm sure i found a UK parliament petition that mentioned a UK-only investment option for national employer schemes, but i can't find it again now   

Aretnap

Agree that it's reasonable to be concerned about the proportion of global indexes that consist of a few huge US tech companies, but I'm not sure that a UK tracker would be a big step forwards in terms of diversification. The UK index is itself very concentrated in a handful of sectors, and has chronically lagged behind global markets for at least the last couple of decades. Putting all your pension into it (and IIRC NEST only allows you to pick a single fund) would be a "bold" decision.

A global fund which was deliberately underweight in tech would be a useful option to provide but then your getting into active management options which are beyond the scope of a simple, basic provider like NEST.

dunstonh

taking_stock said:

while googling, i'm sure i found a UK parliament petition that mentioned a UK-only investment option for national employer schemes, but i can't find it again now   

Its not UK only but an increased allocation to UK.  Also, it wouldn't apply to your existing providers in terms of their fund selection but may apply to the default fund.  Both Nest and Peoples pensions have fund choices available.

taking_stock

just seen the headline that UK Pension Funds agree to invest at least 5% in the UK.  It's not much, but it's a start.  I'd still rather the UK was an investment option for NEST and People's Pension.

dunstonh

just seen the headline that UK Pension Funds agree to invest at least 5% in the UK.

You need to read beyond the headline.

Most funds already hold around  3-10% of the equities allocation in the UK anyway.
This is about investing in private markets.    The target is 10% across private markets of which half should be UK private markets.

Private markets are illiquid and carry increased risks.   That is partly why pension funds have moved away from them.

This is not about UK equities in the FTSE 100, all share etc.

Plus, its only for the default funds.