New royal mail collective plan

greatkingrat

Would this scheme count as DB or DC if you wanted to transfer out? If the lump sum is guaranteed not to decrease, does that mean a transfer would require financial advice?

dasherman

greatkingrat said:

Would this scheme count as DB or DC if you wanted to transfer out? If the lump sum is guaranteed not to decrease, does that mean a transfer would require financial advice?

The pension element is DC and was specifically designated as such in the legislation. But the lump sum is DB so would potentially require financial advice.

DRS1

dasherman said:

greatkingrat said:

Would this scheme count as DB or DC if you wanted to transfer out? If the lump sum is guaranteed not to decrease, does that mean a transfer would require financial advice?

The pension element is DC and was specifically designated as such in the legislation. But the lump sum is DB so would potentially require financial advice.

They say it may take a while before advisers understand the scheme enough to give advice!

A good thing though is you can transfer just the pension part and leave the lump sum bit behind.  That may make it easier to do a transfer out to a SIPP or DC scheme.

olb81

Thanks ive worked out how to make a one off or monthly payment into nest and they automatically do the tax relief.
I have a few more questions... 
1. Does nest have many investment options to choose from? For example a passive tracker fund
2. It says I can transfer old pots in. Does this result in several pots in my nest account or just the balances added to my main balance?
3. I also have standard life and Scottish widows pots... any thoughts on whether they are better than nest?
4. If they are better, can I transfer to one of those and also make tax relief payments into that one In future?

gm0

olb81 said:

Thanks ive worked out how to make a one off or monthly payment into nest and they automatically do the tax relief.
I have a few more questions... 
1. Does nest have many investment options to choose from? For example a passive tracker fund
2. It says I can transfer old pots in. Does this result in several pots in my nest account or just the balances added to my main balance?
3. I also have standard life and Scottish widows pots... any thoughts on whether they are better than nest?
4. If they are better, can I transfer to one of those and also make tax relief payments into that one In future?

1.  Few compared to a SIPP (where there would be 1000s).  All platforms offer their own mix of "fund choice" "fees" "guidance help" and differ on how cheap regular saving plans are is vs the odd one off.  Also reputation. Digital facilities. Cashback offers (offsetting platform fees).  Simplified platforms tend to offer "risk tiered" one and done options. And just a few.  Once you start worrying about individual investment choices more seriously - they become limiting.  Build alongside. Or transfer.

Nothing is sustainably "the best" (for savers and pensioners spending down).  All do the job.  NEST didn't make it onto my shortlist for a wide range pension in drawdown.  But it wasn't invented or marketed for that.  It does what it does. An everyman option for autoenrolmment for a wide range of employers - during saving up.

2. Most DC transfers converge onto a DC main balance.   

There are as always with pensions some historic exceptions with separate balances of different types which we should probably avoid here for this discussion.

3.  Impossible to say.  

All that matters while waiting to be of pension age apart from convenience of admin.  

Is whether there is an investment you want to hold available.  And the cost of that - and any "having an account cost" is the same or better than a proposed alternative.  I kept an old scheme that I was deferred in. 
It's platform cost is zero.  Hard to compete with free.  

Most other differences pension to pension are minor.  SL and SW have a lot of old product and schemes and it all varies with scheme/product and employer and era of membership. There is no way to tell you at brand level that x < y.  You need to understand the platform (or scheme cost) and the fund management cost from factsheets after any "discount" to standard fund provider costs - in that scheme.  Can't just look it up and be 100% right first time.  Careful.  And then compare them to what you can do elsewhere. 

4.  Yes - you can contribute to your new scheme or schemes in future.  Limitations (annual allowance) and earnings restrictions are about you. Not per scheme.

olb81

Had a look at nest , it has a few opions, I assume they are all managed funds
Looks like the higher risk and shariah funds have performed best lately.

gm0

Recent past performance.  Is not really your friend.  Something which is "good" in a tech boom.  Is bad in a tech bust.  And something bad during a tech boom - say more local to uk europe utilities, consumer durables etc.    May be better in a slowdown as people still need washing powder and to go to tesco/aldi etc.  That's the trouble with all the "fact sheet five years looking back".  Doesn't say anything about the business cycle or the long term.

Anything "global" will be 50-60% USA.  Unless specifically designed not to be.  And a lot of that will be the few big stocks (because that's how weighted by market capitalisation works).

Of more interest than recent performance.  Is what is in a fund.  The top 20 and how much of the total that top 20 represents.

The USA and the big cap tech - Nvidia etc. Alphabet, MSFT have done great.  And have done great longer than doomsters can believe possible.  And here we are.

Some 4-5 years ago i was firmly of the opinion "this cannot go on much longer".  And here we are. Bar a short dip. No prizes for betting against it.

Over the long long term global equities is global equities.  And if you have 30 years to save up and 40 to deaccumulate you can be phlegmatic about short term trends, and business cycles of boom and bust.  Just keep buying a little all the time. Into the volatile markets.

I have had a 50% drop of my entire pot during my saving up 2007/08.  It did not feel great.  At all.  And yet buying units at half price.  Should.  Provided you have faith that the upward trend line - will - in fact - resume.

olb81

So ideally I should open a S.i.p.p with say vanguard and jmport the other 3 into there.
Out of the 3 I have, standard life has much more choice of funds including passive global funds.
It's not straightforward is it.

DRS1

Maybe do a comparison table showing things like fees investment choice ease of admin (eg online phone post) and any other things that matter and see if you would like everything in Vanguard or if actually it may be better to keep some things where they are.

Back in the 80s when I started my pensions I deliberately had three different pension companies and then expanded it to 5 when the tax rules changed a bit.  Having everything in one place can be good but you don't have to do that.

Albermarle

olb81 said:

Thanks ive worked out how to make a one off or monthly payment into nest and they automatically do the tax relief.
I have a few more questions... 
1. Does nest have many investment options to choose from? For example a passive tracker fund
2. It says I can transfer old pots in. Does this result in several pots in my nest account or just the balances added to my main balance?
3. I also have standard life and Scottish widows pots... any thoughts on whether they are better than nest?
4. If they are better, can I transfer to one of those and also make tax relief payments into that one In future?

The answer to all these questions, is not relevant due to the answer to your previous question.

 I know he company pays in 13% but does this outweigh not having control of your own pot?

Yes, YES and YES AGAIN

13% is pretty high by most employer standards, so it would be crazy not to benefit from it .