Switching Pension Investments

Kiran

I recently changed jobs, I had my previous job for 18 years and built up a reasonable pension pot. I was lucky enough to be on a 10% matched employer contribution pension. The pot was invested in an L&G fund which hasn't been performing brilliantly but because of the monthly contributions has seen it grow. Fast forward to now, I am on a lower employer contribution now, I pay 10% my employer pays 5%. I make up the difference in my pension contributions with the remainder of the value going into a stocks and shares ISA.

I'd like to move my previous pension to a fund that grows faster, I'm looking at FTSE Global All World as a fund which has better growth potential and moderate risk over the time I'm likely to be invested in it. I'm looking at around 15 years before I even contemplate drawing anything from it. My current plan is to remain in my existing employers scheme in their recommended fund and invest my previous fund.

It appears that my L&G pension has no exit fees, but it also doesn't have access to the fund I want to invest in. Does anyone have any advice on a provider that will give me access to the fund I would like to invest in with reasonable fees? Or can you point me in the direction of where I could find that info?

Any advice gratefully received

Marcon

Kiran said:

I recently changed jobs, I had my previous job for 18 years and built up a reasonable pension pot. I was lucky enough to be on a 10% matched employer contribution pension. The pot was invested in an L&G fund which hasn't been performing brilliantly but because of the monthly contributions has seen it grow. Fast forward to now, I am on a lower employer contribution now, I pay 10% my employer pays 5%. I make up the difference in my pension contributions with the remainder of the value going into a stocks and shares ISA.

I'd like to move my previous pension to a fund that grows faster, I'm looking at FTSE Global All World as a fund which has better growth potential and moderate risk over the time I'm likely to be invested in it. I'm looking at around 15 years before I even contemplate drawing anything from it. My current plan is to remain in my existing employers scheme in their recommended fund and invest my previous fund.

It appears that my L&G pension has no exit fees, but it also doesn't have access to the fund I want to invest in. Does anyone have any advice on a provider that will give me access to the fund I would like to invest in with reasonable fees? Or can you point me in the direction of where I could find that info?

Any advice gratefully received

L&G's All World Equity Index Fund doesn't fit the bill...?

SVaz

So you are just looking at putting extra contributions into a Sipp then?
Just go for a low cost one,  AJ Bell, Interactive investor or the slightly dearer Hargreaves Lansdown,  they all have a full range of investments.

HSBC FTSE global All world index includes emerging markets.
Fidelity index World doesn’t.  

They are both low cost trackers. 

dunstonh

I'd like to move my previous pension to a fund that grows faster, I'm looking at FTSE Global All World as a fund which has better growth potential and moderate risk over the time I'm likely to be invested in it.

It isnt the pension that grows.   It is the investments within the pension.   What similar options does the existing pension have? It may not have the exact one but there is usually a global tracker in most pension schemes.

Sometimes people have moved from better pensions to lower quality or more expensive pensions when all they had to do is change funds in the existing plan.

FTSE Global All World is not moderate risk.   Moderate is typically around 60% equities.   100% equities is high risk.

Kiran

Marcon said:

L&G's All World Equity Index Fund doesn't fit the bill...?

This is my backup option, I did some reading up and from a couple of comparisons it performed well but lower than say the Vanguard option. Over the 15 odd years the difference could be a reasonable amount 

Kiran

SVaz said:

So you are just looking at putting extra contributions into a Sipp then?
Just go for a low cost one,  AJ Bell, Interactive investor or the slightly dearer Hargreaves Lansdown,  they all have a full range of investments.

HSBC FTSE global All world index includes emerging markets.
Fidelity index World doesn’t.  

They are both low cost trackers. 

So my thoughts were, and happy to be told this is a bad idea if it is, my previous pension pot was going to be invested in an global all world, no further contributions, just the current fund value and hopefully let it grow. My current employers pension would be invested in their standard fund which is lower risk. I'm likely to be working in the same industry for the rest of my working life and will equal the same or greater level of contribution with the new job as I did with my previous given the time left until I could even consider retiring.

Hopefully that make a bit more sense 

Kiran

dunstonh said:

It isnt the pension that grows.   It is the investments within the pension.   What similar options does the existing pension have? It may not have the exact one but there is usually a global tracker in most pension schemes.

Sometimes people have moved from better pensions to lower quality or more expensive pensions when all they had to do is change funds in the existing plan.

FTSE Global All World is not moderate risk.   Moderate is typically around 60% equities.   100% equities is high risk.

There is an All World with L&G which is my fall back option, but it appears that there are others which perform slightly better. I wouldn't be opposed to using this, I was about to switch to it before researching the other all world fund such as Vanguard.

Point taken on the risk level, the intention would be to stick with it until I'm about 5 years away from retirement and move it to a lower risk option then. I would like to think over 10 or so years the fund will weather any peaks and troughs and if it wasn't where it needed to be at retirement I would be able to use the fund built up in my current employers pension.

I may be way of the wark with this, and happy to hear if I am.

LHW99

My current employers pension would be invested in their standard fund which is lower risk.

So in the "default fund"?

That will be one designed for those with no interest / knowledge It won't be spectactularly good, or spectacularly bad, it will just chug along. What equity proportion does it have?

As said above, it's the funds in the pension that matter, and with 15+ years to go, you may get a better result by increasing the equity proportion (not necessarily 100%, unless you are happy with volatility) in the fund you are now paying in to.

What are the fees like? Could you (is it worth) transferring the old pension into your new employer's scheme?

Kiran

LHW99 said:

My current employers pension would be invested in their standard fund which is lower risk.

So in the "default fund"?

That will be one designed for those with no interest / knowledge It won't be spectactularly good, or spectacularly bad, it will just chug along. What equity proportion does it have?

As said above, it's the funds in the pension that matter, and with 15+ years to go, you may get a better result by increasing the equity proportion (not necessarily 100%, unless you are happy with volatility) in the fund you are now paying in to.

What are the fees like? Could you (is it worth) transferring the old pension into your new employer's scheme?

Good point about the default, that was a bit lazy of me.

It is potentially worth transferring in, we are about to switch to a new provider so will se what the fees are with the new provider and also what their available funds are.

Thanks

dunstonh

There is an All World with L&G which is my fall back option, but it appears that there are others which perform slightly better. 

Are you factoring in the charges?    Your current pension is probably bundled.  So, the charges of the provider and fund are "bundled" together and performance is net of those.    Whereas if you use an OEIC or UT, only the fund charges are factored in and shown in the performance.  You would need to deduct the platform charges on top of that.     So that could account for the "slightly better" difference.

Plus, life & pension funds are often priced a day behind OEICs/UTs on performance charts.   If the difference is slight, it could be down to that.    

Albermarle

Kiran said:

dunstonh said:

It isnt the pension that grows.   It is the investments within the pension.   What similar options does the existing pension have? It may not have the exact one but there is usually a global tracker in most pension schemes.

Sometimes people have moved from better pensions to lower quality or more expensive pensions when all they had to do is change funds in the existing plan.

FTSE Global All World is not moderate risk.   Moderate is typically around 60% equities.   100% equities is high risk.

There is an All World with L&G which is my fall back option, but it appears that there are others which perform slightly better. I wouldn't be opposed to using this, I was about to switch to it before researching the other all world fund such as Vanguard.

Point taken on the risk level, the intention would be to stick with it until I'm about 5 years away from retirement and move it to a lower risk option then. I would like to think over 10 or so years the fund will weather any peaks and troughs and if it wasn't where it needed to be at retirement I would be able to use the fund built up in my current employers pension.

I may be way of the wark with this, and happy to hear if I am.

Maybe worth keeping in mind that equities have had a very good run recently. Global index funds are up nearly 50% in the last three years.
Now on the forum it is always advised not to try and time the market, fools game etc .
However there have been quite a few threads recently discussing reducing equity content, taking some profits, being a bit more defensive. ( not everybody's opinion of course) 
So just wondering whether converting a fund now into 100% equities is maybe being a bit 'brave', despite having 10 years to ride out any negative patches.