Pension Sharing Order - Help.

Lbuk

Hi. I have been awarded a pension sharing order as part of my divorce settlement worth £600,000.

I currently have no pension of any description and I need to set up a pension fund so that the amount can be credited to it.

I have made an appointment with a financial advisor as advised but really I have no idea why it’s all seeming so complicated and I’m feeling overwhelmed.

I just want the value of the money to be the same when I retire in 15 years time and for it to definitely be there.

Obviously if it is of greater value then that would be lovely but I do not want to risk it not being there at all.

My friend says to just stick it in a standard life pension fund and have done with it.

Can someone offer some practical reassurance or insight please.

 Thanks

JoeCrystal

Is it a DC pension or DB pension?

Aylesbury_Duck

You could open a SIPP with any of loads of providers.  Given the significant value, I think you've done the right thing to get some initial advice, but don't rush into anything or commit.  It's important you gain at least a little understanding of your options.  

Your age, intended retirement age, life expectancy and estimated pension income needs are all going to important considerations when deciding where to invest the funds. 

Personally, I'd be looking for a low-cost pension provider and get the sum placed in something like a default retirement fund at this stage.  That buys you time to get further advice and make a more considered choice based on all the factors I listed earlier.

Cobbler_tone

Lbuk said:

I have made an appointment with a financial advisor as advised 

Hopefully you will feel less overwhelmed after this. I fear that the replies you may get on here may add to your anxiety. It is far better to ask someone questions in person, who will hopefully have access to your full situation and needs.
Take the opportunity to get a proper understanding of your pension and options, reflect and then make an informed decision. 

Marcon

Lbuk said:

Hi. I have been awarded a pension sharing order as part of my divorce settlement worth £600,000.

I currently have no pension of any description and I need to set up a pension fund so that the amount can be credited to it.

I have made an appointment with a financial advisor as advised but really I have no idea why it’s all seeming so complicated and I’m feeling overwhelmed.

I just want the value of the money to be the same when I retire in 15 years time and for it to definitely be there.

Obviously if it is of greater value then that would be lovely but I do not want to risk it not being there at all.

My friend says to just stick it in a standard life pension fund and have done with it.

Can someone offer some practical reassurance or insight please.

 Thanks

Don't underestimate the emotionally draining impact of your divorce - nobody, however anxious they are to part ways, comes out unscathed. Getting to grips with pensions for the first time in your life is also tough going, so don't kick yourself for feeling as you do.

Ignore your friend, who may mean well but hasn't a clue what they are talking about.

You are going to see a financial adviser (I trust an independent adviser?) and their job is to explain 'everything' to you. You simply need to say what you've said in your post: you are fairly risk averse and thus keener to preserve  the capital value of your pension + some growth, rather than taking high levels of risk in the hope of greatly increasing it.

Marcon

JoeCrystal said:

Is it a DC pension or DB pension?

Irrelevant if OP has to transfer out (although I'd put money on it being DB originally!).

Cobbler_tone said:

Lbuk said:

I have made an appointment with a financial advisor as advised 

Take the opportunity to get a proper understanding of your pension and options, reflect and then make an informed decision. 

Completely agree with the second half of your sentence!

I'm not sure there is anything to understand at this stage - if OP has to transfer out, knowing the terms of the original scheme will have no impact on anything. OP, I'm assuming from your first post above that you do have to transfer out and can't stay in your ex's scheme? If you've not checked the point, now would be a good moment.

dunstonh

I have made an appointment with a financial advisor as advised but really I have no idea why it’s all seeming so complicated and I’m feeling overwhelmed.

Many things that you don't deal with often seem complicated.

I just want the value of the money to be the same when I retire in 15 years time and for it to definitely be there.

So, you want the value to remain the same which means you want spending power of it to go down in real terms?
£600k will have the spending power of around £300k in 15 years time.

Obviously if it is of greater value then that would be lovely but I do not want to risk it not being there at all.

Every option has risks.   However, risk is a sliding scale.  You don't need to go gung ho but equally, taking no investment risk may remove investment risk but it increases shortfall risk and inflation risk.   

You need to take a sensible level of risk.  Not too much, not too little.

My friend says to just stick it in a standard life pension fund and have done with it.

Which Standard Life?
Standard Life Aberdeen (the parent company) recently sold the Standard Life brand to Phoenix.    They sold their old-fashioned style pensions to Phoenix as well, whilst retaining the modern platform-based pensions and rebranding them under the Aberdeen brand.

So, did your friend mean Standard Life, now owned by Phoenix, or Standard Life, now branded as Aberdeen?

Both versions of Standard Life offer whole of market pensions wtih over 30,000 investment options.  Which of those 30,000 did your friend say to use?   Or is your friend using an old fashioned Standard Life pension that is no longer available?

You don't have to answer those questions, as I made them to point out the issues of speaking to a friend who could be equally as clueless as you on the subject (most people are clueless - so don't feel bad about that).

Clive_Woody

Please make sure that this is an Independent Financial Advisor (IFA) and not a Financial Advisor who only sells limited products and is tied to selling those. Do not feel pressured into making a quick decision on what to do with this money.

MEM62

Lbuk said:

I have made an appointment with a financial advisor as advised but really I have no idea why it’s all seeming so complicated and I’m feeling overwhelmed.

Please make sure that they are an IFA (Independent Financial Advisor) and not just a Financial Advisor - who is not much more than a salesman.  An IFA will put you on the right track and calm your concerns.    

Lbuk said:

I just want the value of the money to be the same when I retire in 15 years time and for it to definitely be there.

No, you don't.  You want it to be worth considerably more so that the spending power is preserved. 

Lbuk said:

Obviously if it is of greater value then that would be lovely but I do not want to risk it not being there at all.

You cannot avoid risk.  As has been pointed out, the appropriate level of risk is what is important.  If well managed, the chances of loosing it all are remote.  

Albermarle

So, did your friend mean Standard Life, now owned by Phoenix, or Standard Life, now branded as Aberdeen?

Both versions of Standard Life offer whole of market pensions wtih over 30,000 investment options.  Which of those 30,000 did your friend say to use?   Or is your friend using an old fashioned Standard Life pension that is no longer available?

The retail/consumer Standard Life ( now owned by Phoenix) offer some relatively simple off the shelf investments, which would be suitable for an inexperienced investor. They may not be optimum but would largely do the job.

Personal Pension | Private Pension Plan | Standard Life