Is this a good pension fund?

lynxthecat · 24 February 2018 at 11:37AM

Hi there, is this a good fund to be investing in for the next 30 years?

Aegon Balanced Tracker Flexible Target Pension Fund
GB00BYM30711:GBP

URL:

markets.ft.com/data/funds/tearsheet/summary?s=GB00BYM30711:GBP

AnotherJoe · 24 February 2018 at 11:53AM

You cant ask "is it any good" in isolation from your personal circumstances about which we know nothing. But i will now contract myself by saying if it is or isnt

Its very conservative, (does that fit you? Maybe but for 30 years I'd say its far too conservative and therefore likely to be a suboptimal choice) and also has gone for the fad of "lifestyling" (reducing down to cash as you approach pensionable age) but that has now become somewhere between unnecessary and counterproductive, and whilst you can switch out nearer your retirement date why start one with that unnecessary feature now.
Its also expensive (1%) for a tracker.

So no, i dont think it is a good fund

Linton · 24 February 2018 at 11:55AM

It is an average relatively cautious moderately diversified fund with nothing particular to recommend about it. 2/3 of the approx 60% in equities is in UK and US. In my view this is far too concentrated and with 30 years to go you are likely to benefit from choosing something more adventurous with better equity diversification.

The flexible target bit makes no difference for the next 24 years and even then may not be appropriate.

lynxthecat · 24 February 2018 at 12:20PM

Update on personal circumstances: I can afford to put away £1m over the next 30 years into the fund (everything I earn above 100k).

AnotherJoe · 24 February 2018 at 12:27PM

Then its additionally a poor fund for you, with those sort of resources you should be far more adventurous, I'd be going 100% equities not 50/50 as this one is but even if you are very cautious person Id say you should still be 60-70% equities and preferably 75-80% as a minimum.

dunstonh · 24 February 2018 at 1:04PM

Update on personal circumstances: I can afford to put away £1m over the next 30 years into the fund (everything I earn above 100k).

In which case, you should be looking at something more advanced than that. You are also going to have tax issues if you use the wrong tax wrappers.

AlanP_2 · 24 February 2018 at 2:16PM

If I had anywhere near that amount to invest I would be talking to an IFA, even more likely if I was relatively inexperienced.

Lifetime Allowance needs to be considered and Annual Allowance let alone tax planning for drawing out and possibly inheritance.

It will cost but in the context of your amounts I would say worthwhile.

xylophone · 24 February 2018 at 2:18PM

Why not take personal advice from an IFA?

https://www.moneyadviceservice.org.uk/en/articles/choosing-a-financial-adviser

http://www.ifa-guide.co.uk/

http://www.cii.co.uk/web/app/charteredtitle/FSSearch.aspx

lynxthecat · 24 February 2018 at 6:41PM

I believe my case is fairly straightforward. I am presently earning between £110k-140k. At my present level of income I believe it makes sense to aim to end up with a pension pot of around £1m, and to achieve this and avoid the six-figure taxation curse I put everything I earn above 100k into my pension fund.

So all that remains is to work out whether the pension fund my present employer offers (the Aegon fund l mentioned above) is fit for purpose.

It sounds a bit like it might not be.

Next step for me then I suppose is to find out from my present employer whether I can select a different Aegon fund, or even an entirely different product. Someone suggested creating a self-managed ISA pension based on a FTSE tracker.

Linton · 24 February 2018 at 7:27PM

lynxthecat wrote: »

...
Next step for me then I suppose is to find out from my present employer whether I can select a different Aegon fund, or even an entirely different product. Someone suggested creating a self-managed ISA pension based on a FTSE tracker.

I suggest you dont take advice from the "Someone". An ISA isnt a pension and wont give you extra rate tax relief, if you want a self managed pension it should be a SIPP. But first you should put in enough into your work pension to get the maximum contribution from your employer.

A FTSE tracker is about the worst tracker you could buy. A world tracker would be much better.

AnotherJoe · 24 February 2018 at 8:48PM

lynxthecat wrote: »

I believe my case is fairly straightforward. I am presently earning between £110k-140k. At my present level of income I believe it makes sense to aim to end up with a pension pot of around £1m, and to achieve this and avoid the six-figure taxation curse I put everything I earn above 100k into my pension fund.

So all that remains is to work out whether the pension fund my present employer offers (the Aegon fund l mentioned above) is fit for purpose.

It sounds a bit like it might not be.

Next step for me then I suppose is to find out from my present employer whether I can select a different Aegon fund, or even an entirely different product. Someone suggested creating a self-managed ISA pension based on a FTSE tracker.

That advice is worth exactly what you paid for it. Or even less. That would be a catastrophically terrible decision for a high rate tax payer that over thirty years would cost you easily many tens of thousands of pounds due to throwing away tax relief. Maybe even hundreds of thousands due to the accumulated growth you'd miss out on

Is this a good pension fund?

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