UPDATE: Reviews section refreshed, redesigned, searchable: Go take a look
Thank you all. This question is not about retirement quotes. It looks like she has inadvertently gone over the annual allowance for a few years due to a massive increase in the pension growth. Although her personal contributions are well below this. Given she has no control over the growth element, we are a bit suprised (and, yes, she should have picked this up earlier, but...).
There are loads of complexities including remedial action taken a while back due to various rulings and the 3 year rule is a no go as this has happened a few times.
Anyway. We need to find out how much shit we are in and what we need to do about it 😬
I take it it's a defined benefit scheme? If not, growth isn't included in the allowance.
"What counts towards the annual allowance
Your annual allowance applies to all of your private pensions, if you have more than one. This includes:
- the total amount paid in to a defined contribution scheme in a tax year by you or anyone else (for example, your employer)
- any increase in a defined benefit scheme in a tax year"
If it's all in one scheme, the provider should contact you if you go over the allowance.
Has anyone used a SIPP as their primary pension and investigated the risks? I've had a few stakeholder pensions over the years and transferred them all about 4 years ago into a Vanguard SIPP. My current employer has a pension scheme with Legal and General and my Vanguard Lifestrategy fund is out performing it by a large margin. Is it worth transferring the contributions that me and my employer make to Vanguard on a regular basis or keep the two funds to mitigate risk? At the moment it's about 90% in SIPP and 10% L&G. The SIPP is over the FCA limit and I was told that even if Vanguard failed, the stock is still personally invested so it wouldn't follow the per institution rules, but I'm not sure how true this is. Anyone been in a similar position?
A friend recommended Pen-gage Ltd for NHS pensions.
In the last 2.5 years I have had 2 informal complaints and now I have an open Formal complaint. My experience has been a complete mixed bag, some extremely good and some extremely bad. Overall, between my employer and NHS pensions I have grave reservations that a piss up in a brewery would get arranged
Thank you Sprootlet. They have an annual allowance review service, so could be a good place to start. Getting a bit concerned about our liability due to potential interest on previous years.
Clearly we have been a bit optimistic that this would have been clearly flagged at the time, and it looks like this assumption is going to end up costing us a lot.
In terms of using a SIPP as your primary pension needs to consider a couple of aspects:
Whether there are additional benefits from your current workplace pension e.g. if it’s defined benefit then the general advise is to leave it be. The difference in performance could be that you’re nearing retirement, so workplace pensions are typically profiled towards ‘safer’ investments to give you a guaranteed payout.
IANAFA but I’ve just moved 4 small pension pots into a SIPP (I’m 61) and have taken a medium risk profile as my main pension is in a DB scheme.
If your workplace pension fund is over £30k then I think you need to talk to a financial advisor anyway.
My current employer has a pension scheme with Legal and General and my Vanguard Lifestrategy fund is out performing it by a large margin. Is it worth transferring the contributions that me and my employer make to Vanguard on a regular basis or keep the two funds to mitigate risk?
My current pension is with LandG and they are ****ing woeful. Like really really bad. I've been paying into it about 9 years and it had gone up around 20% in that time. Admittedly the figures are skewed as I am absolutely caning it just now so loads of the money has only just gone in, but 2% per annum needs a hard kick in the nuts. A couple of years ago I took nearly everything out and spread it between my 2 other best pensions ( Aviva and Royal London) and a SIPP. The SiPp went up half as much in the next six months as it had the previous nine years..
The difference in performance could be that you’re nearing retirement, so workplace pensions are typically profiled towards ‘safer’ investments to give you a guaranteed payout
It could be, but I'm inclined to think it is just that LandG is shit
If your workplace pension fund is over £30k then I think you need to talk to a financial advisor anyway.
Hmmm. Not convinced.
Royal London
I hold a few Royal London funds that have done very well over the last 4-6 years.
Lots of employers use L&G because they are cheap on admin costs. Your company frankly isn't interested in who makes best returns for you, so if you want better then move it out leaving just enough so the pension is active and you can keep paying in and continuing to receive the employer contribution.
That said L&G have multiple funds so saying they're shit without considering fund choices is slightly wrong, some high risk L&G funds have done very well.
I have 1/6 of my pension currently in the L&G work scheme and it's getting to time to move some into my Quilter, but it's up 33.4% in 6 years. Which is not dreadful.
Comparing previous years performance to the frankly incredible gains of the last 2 years isn't really meaningful.
That said L&G have multiple funds so saying they're shit without considering fund choices is slightly wrong, some high risk L&G funds have done very well.
Have two L&G funds. Each up around 20% since buying less than a year ago.
One of the Royal London funds is up 85% since buying in 2019. The other 35% since buying in 2022.
agreed; I consolidated 6 other workplace pensions into my Quilter just over a year ago and it's up >20% since. It's only relevant to look at longer term returns with all the good and bad years.
OFC the aim of funds and fund managers is to outperform the market - as was pointed out very vocally by some on here at the time I was considering appointing an IFA to manage my pension, in the end almost no-one does, so also in considering how well a company's fund(s) have performed it is highly relevant to quote how the market has done in general in that time.
I think I need to take a serious look at my current pension situation.
Workplace is L&G so I think I'll change the risk associated with my deposits to higher risk. I might reduce my contribution as well so I still maintain the maximum 5% contribution from my employer and then start up a sipp 🤔.
I would be careful saying ‘my fund is up X’ over the past year as much of this is the rebound from Trumps liberation day crash in April 2025, in my view. Don't get me wrong, there has been good growth with markets up, more like 10% vs just before Liberation day (so+10% over 16 months vs 20% over last 12 months).
I would be careful saying ‘my fund is up X’ over the past year as much of this is the rebound from Trumps liberation day crash in April 2025,
If say i invested 20k in 2019, didn't add to it and that investment now sits at 37k today then that's gone up 85%, regardless of any bounce last year or the year before.
Yep agreed, that’s why it’s better to look at the growth over the longer term.
I am just saying to watch what you are comparing to, Saying you are up 15% vs a 10% crash is really only a 5% gain on what you had before you lost the 10%. Stats can be written in many ways. For example, if your £37k above grew 20% last year then you had about €31k a year ago, this £31k was up just over 50% vs 2019. Maybe you had 170% growth by last year so the 85% growth you have today is actual half what you had a year ago, who knows.
Whether there are additional benefits from your current workplace pension e.g. if it’s defined benefit then the general advise is to leave it be. The difference in performance could be that you’re nearing retirement, so workplace pensions are typically profiled towards ‘safer’ investments to give you a guaranteed payout.
I'm 42 so still a fair way off. I'm happy to take a higher risk approach for now. My current employer are pretty good with their contributions (10%) and I contribute 20%, but AFAIK it's a standard stakeholder pension with no real benefits
My current pension is with LandG and they are ****ing woeful. Like really really bad. I've been paying into it about 9 years and it had gone up around 20% in that time. Admittedly the figures are skewed as I am absolutely caning it just now so loads of the money has only just gone in, but 2% per annum needs a hard kick in the nuts. A couple of years ago I took nearly everything out and spread it between my 2 other best pensions ( Aviva and Royal London) and a SIPP. The SiPp went up half as much in the next six months as it had the previous nine years..
Yup, this is kind of where I'm at. My employer won't pay into my SIPP, so thinking of transferring funds out regularly (every 6-12 months) and either have the single SIPP or set up another higher growth pension and having two private pensions, but compound growth would take a hit then?
Have two L&G funds. Each up around 20% since buying less than a year ago.
One of the Royal London funds is up 85% since buying in 2019. The other 35% since buying in 2022.
Interesting. My work have recently move to L&G from Fidelity so I guess I need more data to know if it's worth doing anything.
Saying you are up 15% vs a 10% crash is really only a 5% gain on what you had before you lost the 10%.
Saying that would be silly and disingenuous....
IMO, you can/should only compare your value to your initial investment. Otherwise you'll sound like my B-in-L when he only tells you about the bets he's won and not the hundreds he's lost.
Fidelity so I guess I need more data to know if it's worth doing anything.
The one Fidelity find I hold is up 25% since 2024.
set up another higher growth pension and having two private pensions, but compound growth would take a hit then?
Shouldn't do. Whether you have one pot or 10 little pots each with its own Compound growth, you won't be any different if the rate is the same for all.
You might lose a bit if you have a fund fee for each for example, as opposed to one fund fee for a big pot, but if that's a % of the pot it still would be the same.
£10 growing at 10% pa for 5 years is worth 10 x 1.1^5 = £16.10
£1 on same terms is worth £1.61, so 10 £1 pots are worth £16.10
I might reduce my contribution as well so I still maintain the maximum 5% contribution from my employer and then start up a sipp
Double check if your employer adds employer's NI on your contributions. ( It's not particularly likely, but a huge bonus if they do (13.8/15% on top))
Shouldn't do. Whether you have one pot or 10 little pots each with its own Compound growth, you won't be any different if the rate is the same for all.
Totally agree
You might lose a bit if you have a fund fee for each for example, as opposed to one fund fee for a big pot, but if that's a % of the pot it still would be the same.
Totally agree. ( As you correctly say So long as the fees are percentage rather than absolute)
I've not used L&G but the performance of one workplace pension isn't indicative of them being bad.
Lots of orgs chose what the defaults are for their pensions. Historically at least they were very heavy into UK markets and since 2008 these have performed awfully compared to the US (the last 18months of FTSE100 aside). If your employer or you haven't changed things then it's no wonder it's performed badly.
It may also be related to risk profile as noted above but I thought that usually started only 10yrs or so from selected retirement age.
I think I need to take a serious look at my current pension situation.
Workplace is L&G so I think I'll change the risk associated with my deposits to higher risk. I might reduce my contribution as well so I still maintain the maximum 5% contribution from my employer and then start up a sipp 🤔.
you might want to check the fees on a SIPP vs the fees on your workplace pension before making that move. Workplace schemes typically have a limited fund choice but often have lower fees than SIPPs. And, as other have said, check the funds you’re invested in. The default ‘lifestyle’ funds will have different characteristics from other choices. You could potentially create a fund mix that suits your risk appetite and maintains a low fee structure.
Many employer schemes also have additional employer contributions for some types of AVCs.
Workplace schemes typically have a limited fund choice but often have lower fees than SIPPs. And, as other have said, check the funds you’re invested in. The default ‘lifestyle’ funds will have different characteristics from other choices. You could potentially create a fund mix that suits your risk appetite and maintains a low fee structure.
This.
My workplace has People's Pension and a very limited choice of funds, particularly as I wanted ESG.
I chose to stay with my existing Standard Life pension and choose a set of funds that balanced fees against performance. So far I am significantly up on where the workplace pension would have been.
If your workplace pension fund is over £30k then I think you need to talk to a financial advisor anyway.
Hmmm. Not convinced.
Happened across a bit more info in this to clarify:
If you have a defined benefit pension, also known as a final salary pension, you would almost certainly lose money by moving it. There is legislation to protect people from this: anyone with a cash equivalent transfer value of more than £30,000 is obliged to take financial advice before transferring out.
