Regular / ongoing partial transfers from GPP to SIPP

D503
D503 Posts: 3 Newbie
I have a Scottish Widows DC GPP with my new employer, contributing via salary sacrifice, maximising employer benefits (contribution matching, NI rebate etc...). Its invested in the default Pension Portfolio 2 (GB00B09CD637) with total annual fees of 0.55% (platform + fund).

After a year of contributions I checked to see how its performing and feel I can do better with my own fund selection. However, the funds available to me on SW do not really give me what I'm after and some appear to quite high tracking errors.

I hold a SIPP with HL and follow a mostly passive / indexing approach for new investments (I will most likely change this to Vanguard SIPP if / when they start one and depending on T&C's relating to transfers).

Speaking to SW they will allow partial transfers out (providing I leave > £2 in the pot) and HL will accept partial transfers in, both with no cost.

I know that I will increase the cost slightly due to HL platform 0.45% + circa 0.25% for index funds but I feel this will could be countered by selecting funds with better / lower tracking errors than those available through SW.

Currently there is just over £15k in the SW pot and after the initial transfer I am considering transferring in increments of £5k, which would mean 3 transfers a year.

£5k transfers comes from putting £5k in a general account (HL or my Vanguard) with the same investment strategy and if any significant gains are made when the transfer sum is out of the market, then balancing it out from general account investment.

Does anyone have experience / advice relating to partial transfers and / or any thoughts on the methodology considered above.

Thanks in advance.

Comments

  • Brynsam
    Brynsam Posts: 3,643
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    A year is a very short time on which to base a decision to transfer funds, even on a partial basis.
  • D503
    D503 Posts: 3 Newbie
    Agreed, but the performance (or my perceived lack of it) only partially influences my consideration to transfer into alternative funds.

    The other leading factor is asset allocation and the current fund has too much in UK equities (21%) for my liking, my preference for the equity component is a global index tracker or similar + small cap index.
  • Also check if your SW pension is made up of segments. If you continually do partial transfers by way of segments then eventually you will run out of them to transfer.
  • jamesd
    jamesd Posts: 26,103
    Name Dropper First Post First Anniversary
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    Three times a year seems excessive. Surely you can find something at SW that you can live with for more than a few months?
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