I posted some comments way back in this thread but since then have opted to stay out as you appear to be asking a bunch of strangers for advice or to comment on the options available to you.
I really think you need to take some professional advice.
In your comment about £80k investment to support £3.4k drawdown you have made no allowance for tax; this will be applied on an emergency code basis and you then correct through your annual tax return. It won’t last for 23 years.

as you appear to be asking a bunch of strangers for advice or to comment on the options available to you.
I really think you need to take some professional advice.

we-eeell not quite, we’re one big family on here 🙂 and to be honest, some of the people on here are probably as knowledgeable as some IFAs, or at the worst manage their money adequately. what would footflaps or poolmans IFA bring to the party for instance?

i dont mean to sound flippant there, its good advice, i appreciate it and i may yet go down that route. if you remember the start of the thread, id been to an IFA but they wanted a percentage of all money invested which would be so much as to wipe any gains out id have thought.

if theres an IFA who would just charge a nominal fee for an hours advice say, to look over my options and give advice on it id probably do that.

btw i assume from your tax comment that you’d probably side ‘against the SIPP’?

s’wat i mean, its probably that close as to not really matter too much which i choose as i cant predict when ill die, but interested in expert opinion, which in the case of knowledgeable stw forum members, i do actually consider ‘expert’.

thanks 🙂

Good luck with whatever you finally do.

In your comment about £80k investment to support £3.4k drawdown you have made no allowance for tax; this will be applied on an emergency code basis and you then correct through your annual tax return. It won’t last for 23 years.

If he just moves £80k from DC pensions to a SIPP, no tax is incurred as he never sees the money, it just transfers between pension funds.

He can then draw down £3.4k a year and pay tax on that and all his other pension incomes as would any pensioner.

£3.4k is approx 4% of £80k which is generally considered to be the sustainable draw down rate. Lasting 20 years is perfectly feasible, but it all depends on how well the markets do etc and no one knows what will happen in 20 years time.

In terms of Tax, there is no difference between a SIPP and a DC pension – they’re treated the same.

it will be going into a pension mate, its just a question of which one. the choice is amalgamating £80,000 into current DB pension guaranteeing a further £3400 per year for life, or putting this money into a SIPP (another type of pension) which will give me more versatility but when its gone its gone.

thanks

ok, im about to press the button on integrating the £80,000 ‘bits and bobs’ into the fire service pension, but just one last question before i do please.

ive tried getting as much info as possible on my options and what im getting back from IFAs is that my choice basically depends on my appetite for risk.

£80,000 in a SIPP has the potential to go up or down, so if markets dont do well, it could end up less.
£80,000 in a fire DB pension will give me guaranteed £3400 pa.

this is why ive chosen to go down that route, less risk. and if i do live to a ripe old age my £80,000 wont have run out.

my question is for peace of mind that an £80,000 SIPP is a fair equation to £3400 pa.
my fire pension is based on 30 years which i wont get. say very roughly half my working life ill have paid into engineering pensions, half into a fire pension when i retire.
why then would my ‘engineering half’ only equate to about 6 years of a fire pension (which is what theyve told me, and that equals £3400pa). ok engineering pensions may not be as good, but shouldnt they be nearer 15?

im just wary of signing away half my lifes pension payments on an inferior transfer rate i spose.

im betting the answer is ‘its not as simple as that’ 🙂 can you put my mind at rest tho that theyre pretty equal in value and its only the risk appetite that will dictate my final decision?

thanks

this is why ive chosen to go down that route, less risk. and if i do live to a ripe old age my £80,000 wont have run out.

Fair enough decision.

There is no ‘right’ answer as no one knows what will happen to the markets.

yeah, the way i looked at it, theres not a lot in it. if i took a strict £4000 pa from the SIPP it may last me 20 years, maybe a bit longer if i took a bit less or if i made a bit of interest on it.

so it wouldnt alter my life for the better by much by taking ‘a bit more out than £3400pa’, plus its finite.

only way id lose considerably is if i died early, but then im dead anyway 😀

spose the only way id gain from a SIPP is maybe taking out a lump sum if i needed it at any time, the flexibility, but from a pure finance perspective it makes more sense to me to be conservative with my risk appetite.

thanks

Sadx – if i was offered a fixed 4.25% on 80k for the rest of my life i d take it. Maybe the mkts can pay 6,7,9 or 12 % but its variable and not guaranteed.

This year my direct investment pot should return 10%, maybe more. If i was offered half for doing nothing i d be tempted. However, i like meddling.

Tbh i d pay an ifa a few hundred quid for proper advice though.

i (potentially) dont have time to do that mate. complicated, but….. if i dont sign and get it posted to the fire lot by 5th nov, theres no guarantee i can go ahead with it. like i said, its complicated, to do with part of the pension having started a year ago, and i can automatically transfer my DC pots into it within first year.

after 5th nov, id have to apply to transfer it in, which may or may not be granted.

all the IFAs ive contacted have wanted over £1000 for their advice plus a whole lot of time to look over my papers. i have one connected to the family but hes on holiday til end of the month.

so….. if i decide to go ahead with the ‘safe option’ i have to act now or risk not having that option any more.

thanks

Is the £3,400 in today’s money?

if theres an IFA who would just charge a nominal fee for an hours advice say, to look over my options and give advice on it id probably do that.

No offence but, really? You really think a decent advisor could just spend an hour to look at it in the context of your overall financial position and advise you on the best option?

Is the £3,400 in today’s money?

no, its a forecast of what ill get in 7 years time.

No offence but, really? You really think a decent advisor could just spend an hour to look at it in the context of your overall financial position and advise you on the best option?

yes i really do. ive done all the homework, i have all my papers in order with valuations on them, i dont need any further ‘delving’.

it would simply be “this is the valuation of my DC pots, my alternative is putting it in this DB pension to pay £3400pa at 60, what do you reckon?”

mebbes a bit naive, but thats all i need, a knowledgeable head to confirm my options and that £3400pa is about right for a transfer of £80,000 and that its just a case of risk appetite. im about there now, i spose i just dont mind paying a nominal fee to make sure i havent missed any big consideration.

thanks

I would leave it in the SIPP I think. If it is 80k now and I think you said you had seven more years till retirement. Assuming 4% growth that would be 105k by retirement.

A quick look at the various drawdown tools available on the net say that works out at about 5k a year as a safe draw down rate. Don’t forget while you are drawing down from the 105k it is still going up at circa 4% (well hopefully). It would also buy an annuity for circa 5k if you did not want the drawdown risk.

The SIPP is also your cash rather that tied up in a DB pension, that may or may not be an advantage depending on your situation.

IANAL / IANAIFA etc etc.

haha thanks, more to think about then 🙂

ok, so in 7 years time, it may be 105ish (could also be a lot less if markets crash but lets say its 105k).

drawdown is taking money out annually IIRC, so youre basically saying just take 5k per year from it, then its going down gradually with the remainder getting 4% growth (so after many years itd be like £20,000 getting 4% growth etc)…….. taking into account the annual 4% growth (hopefully) how many years would you envisage that lasting? im not good enough with money to work that out! 😀

or you say that amount would just buy me a £5k annuity anyway? apologies for being a financial doofus, but does that mean £5k for life, but then ceases if i die a year later say? so same as the fire DB pension but hopefully a bit more each year?

thanks a lot

There are lots of calculators that will predict how long the money will last based on lots of different risk scenarios, for example

https://www.firecalc.com/firecalcresults.php

The advantage to me of staying in the SIPP is you hedge your bets and keep the flexibility. You don’t need to decide how to actually use it until retirement.

thank you mate, and thanks everyone who’s given advice on here, its been very much appreciated.

ive finally made my decision, and changed my mind now, its going in a SIPP 😀

shows how little i know that i can change my mind so easily, but its not just the last post that made me change it, i re-read the whole thread and it just ‘felt’ the right decision. plus talking to friends and family, it was pointed out that should the value go down, its not really a life-changing amount of money to lose each year. which also made me a bit sad cos thats all ive got to show for half my working life, doesnt seem a lot really.

anyways, the HL application is in the post, thats it, i can concentrate on other things now, phew 🙂

im assuming ill just hear back that its been accepted, ill have £80,000 just sitting there waiting to invest in something, and ill be taking the advice earlier about splitting it either 4 or 5 ways in different markets.

thanks again, really grateful for your time and advice.

Well done, in answer you the annuity question last page is when you bhy an annuity you surrender the capital in exchange for an income.

So a 100k annuity paying say 3.25k pa, once you pay the 100k its gone, you may live 10 years, 1 year or 25 years. The 100k has gone, like an insurance premium which it effectively is.

Just look at your sip pot in the context of your other investments, your house which you may downsize and free up some cash, state pension, employer. Also, you may work in some way in retirement.

I think you made a good call. Whilst a DB pension is a wonderful thing, I don’t think the transfer in they were offering you was great value.

couple of questions if you dont mind…..

firstly the wheels of admin are moving slowly, HL have told me theyve had the wedge in from a couple of my pensions, just sent me some more paperwork to sign and send back and theres still another that theyre waiting on a reply from. so i have some of my pension pot sat with HL doing nothing as i havent told them what to do with it.
i thought it would be better to wait for it all to come in, advise them of my wishes, and away we go. plus i dont know if charges are involved every time something changes or another ‘pot’ is transferred in.

1. im going to take the advice from here and do 20% spreads….

25% in US tracker,
25% in UK smaller companies managed fund,
25% in FTSE 100 tracker,
25% in EU managed fund.
Or 20% for each of these and add 20% Emerging Markets ( China, India, Taiwan, Korea, South America etc).

should i tell them this now and therell just be the one charge from them to do this, and as and when other monies come in i just say ‘stick it with the rest please’ with no extra charge?

2. my wife recently packed in her job to go self-employed. she started a pension late into her employment and has received a statement saying her transfer value is around £2,500.
it hardly seems worth her ‘having a pension’ now as thered be no other contributions from employers, so she’s relying on sharing mine really. shes 43 and if everything goes to plan we’d retire abroad in 7 or 8 years time when i can retire. if that doesnt pan out tho she’d carry on working when i retire (10 years younger than me).
i thought that as its such a low value, it may be worth doing something ‘high risk’ with it and if she loses it she loses it, we didnt really know we had it in the first place anyway.
could she transfer it into my SIPP if she wanted, or start her own HL SIPP to mirror mine and itd be worth exactly the same as topping up mine anyway?
or if she has to keep it in her own name, is it worth looking into a bit of a higher risk gamble?

thanks

Sorry to hijack but I thought it better than starting my own thread.

Is there a quick way to work out if it’s better me starting a pension now (I’m 30 and have none) or overpaying on my 30 year mortgage (29 left!)?

I find pensions hard to get my head into. I’m self employed (ltd) and feel like the money could be better invested into my mortgage overpayments (allowed 10% a year) to see a better return than the ct and personal tax saving at the moment.

Its just a guess though so I’d like to find out!

Basic benefit of a pension is that you get tax relief on contributions, that is especially beneficial if you are a higher-rate taxpayer now but not expecting to be one in retirement. Another huge benefit can be if your employer makes some sort of contribution too and even though that doesn’t really apply in your case there may also be a tax saving if the company pays (a bit) into the scheme rather than giving you more dividends?

Also depends on your mortgage rate of course.

Is there a quick way to work out if it’s better me starting a pension now

As a general rule, the sooner the better as you need all the compound interest you can get to get a decent pot built up….

*cough* not sure if you experts had seen id posted a question before the rude man hijacked my thread 😉 *cough*

*cough* not sure if you experts had seen id posted a question before the rude man hijacked my thread *cough*

HL don’t charge for buying or selling funds, so take your time deciding which ones you want. This will help you decide:

https://www2.trustnet.com/Investments/SectorPerf.aspx?univ=O&SP_sortedColumn=PerformanceCurPerf.P1m&SP_sortedDirection=DESC

Add Japan to the list, so 16-18% in each sector, split between 2 or 3 funds. (I love Baillie Gifford funds personally, though other inferior products are available :wink:)

Open a new SIPP for your missus. She can add to it as and when.

HL don’t charge for buying or selling funds, so take your time deciding which ones you want. This will help you decide:

so is that what im doing, ‘buying some funds’? not investing in stocks or shares or something? i rang them a short while ago and they mentioned its cheaper to do it online rather than over the phone which implied there would be a charge.
do you think the best option is to tell them i want to use my money to ‘buy funds’ and then tell them the above spread?
and that spread…… do i need to break it down further then or do i just give them that info and thats all they need?

thanks

I need an IFA to look at my pensions (pension rules) can anyone recommend an IFA in Manchester city centre? recommendation would be better than google alone, thanks

It very much applies to alexxx as he mentions he has a limited company. As such the limited company can make pension contributions to alexxx’s pension fund (a SIPP for example) tax free.

That’s what I do, make company contributions from my limited company into my personal SIPP.

Thanks for the advice guys, I’ll go find a FA to help me setup a personal SIPP and get the company starting to pay something into it even if it’s a menial amount for now.

I just figured it may make sense to stretch myself for 10 years and pay off the mortgage in that time saving me around 120k than it would be beneficial paying into a SIPP

Sadexp- the sooner you get the money into funds the better. Make sure you look at the management charge on each fund – comparable funds don’t always have comparable charges!

Have HL sent you a welcome back with details on admin charges etc?

I would expect any charges to be a % of invested capital, so no need to wait for all the funds to arrive.

Sadexpunk. If you are going through H&L you will need to be a bit more specific about the funds. For self invest you will have to pick the fund managers/investment companies that best suit your chosen spread of investments.H&L do have their own ready made funds but I think the commission rate is quite high.
Its not difficult with H&L as there is loads of info available and can be broken down into the sectors you are looking at.
Keep an eye on the yearly charges for each fund and remember that H&L add,i think 0.45%,onto each funds charge.
Fundsmith have ,so far,done well for me,so might be worth looking at.Less commission direct than through H&L.
I’ve been slowly transferring pensions and isas away from the large providers/banks as I feel I have more control.

Yeah atp as I indicated there can be a tax saving from that but it’s not quite the same benefit as when the company just bungs in extra money that you wouldn’t have otherwise got.

I love Baillie Gifford funds personally, though other inferior products are available 😉

Sadexpunk. If you are going through H&L you will need to be a bit more specific about the funds. For self invest you will have to pick the fund managers/investment companies that best suit your chosen spread of investments.H&L do have their own ready made funds but I think the commission rate is quite high.
Its not difficult with H&L as there is loads of info available and can be broken down into the sectors you are looking at.
Keep an eye on the yearly charges for each fund and remember that H&L add,i think 0.45%,onto each funds charge.
Fundsmith have ,so far,done well for me,so might be worth looking at.Less commission direct than through H&L.
I’ve been slowly transferring pensions and isas away from the large providers/banks as I feel I have more control.

hmmmm more complicated than i thought but ive come this far so will continue muddling through 🙂
so….. HL manage the SIPP, and within that SIPP are different fund managers that you chuck your money into? is that about right?
i was thinking that HL just took the money you invest and manage it themselves according to your wishes.

Have HL sent you a welcome back with details on admin charges etc?

just had a look through my bumph and there doesnt seem to be any welcome pack, itll all be online i spose. this is their charges page but i still dont really understand what my investment is classed as.

thanks

Gotcha.

Your investment will be classed as a Self invested Personal Pension.
It is up to you to decide which funds you spread your money through so you need to spend a bit of time looking at the details of some funds.
Past performance,commission charges and details of the fund manager together with the funds aims will all be shown.
H&L charge a commission basically to provide you with information and research and to be able to easily manage your investments on line.
If you feel one of your chosen funds is underperforming but another is doing well its usually very easy to transfer using the H&L platform.
H&L do a wealth 150 list that is split into different fund categories. It may be worth you having a look through this first and seeing if any funds fit your criteria.Its not complicated,just needs a bit of time spending on it.There will be funds available that you would never be offered by a financial adviser.
I told my adviser at the bank the 3 funds i’d self invested in and he said he’d never heard of them !

still slowly trying to get my head round the HL investment options…..

i was (still am) a bit overwhelmed by the choices in the dropdown menus but im narrowing them down slightly now. i assume im not dealing in stocks and shares, bonds et al and have done the right thing by unticking everything available apart from ‘funds’ yes?

i then seem to have a choice between ‘unbundled’ and ‘inclusive’ funds in some of them. any idea?

am i best to choose by ‘manager’ or ‘sector’?

bluddy minefield this…….

Sadx in saturday telegraph theres a fund of the week, last week it was the f&c investment trust, if you look on the f and c website you can see what it invests in, pretty tech heavy but has bp shell etc.

I like funds like the above, you just buy them and forget about them, scottish mortgage from baillie gifford is another.

The historic performance on the above is good but its your hard earned cash so only you can decide.

I dont use hl so cant answer your question on that though

I really worrry that you’ve waved goodbye to a decent pension and have no idea what you’re doing. Not saying that to be rude just worried about you and how you’ll be when you draw benefits.

There will be funds available that you would never be offered by a financial adviser.

Hargreaves have a retail platform and don’t offer access to as many funds as a decent IFA could secure on an alternative platform. More than enough mind you, so you can create something different, but this statement isn’t correct.

H&L do a wealth 150 list that is split into different fund categories

Not sure I’d rush out and look at that list.

https://www.ftadviser.com/platforms/2017/10/11/hargreaves-lansdown-s-buy-list-under-fire/

As I say I am not sure I’d be looking at that list of funds to use as a basis of my retirement but other opinions are available.

I’ve seen quite a few IFA’s over the years and have never been offered funds from smaller providers. It has always been mainstream large investment/insurance companies.I doubt very much an IFA would spend the time to research 100/200/300 funds or more for a client.

I really worry that you’ve waved goodbye to a decent pension and have no idea what you’re doing.

i think youre 50% correct stu 🙂 im not sure it was a decent pension in the first place, the facts and figures i stated in the early days of this thread seemed to suggest it was just doing the bare minimum. youre absolutely right about the ‘no idea what you’re doing’ tho. thats why i started the thread, to see if it was worth me changing it, and common concensus was that yes, it is. for that, im grateful for all the help and advice ive had so far, i just seem to need that extra push across the finishing line, get my money invested in ‘something’ and let it stay there til i retire. i do still have my other pots that i havent touched, these are just the ones deemed to be underperforming.

im guessing that i could pick any one of you on this thread to give me advice that would outperform these pots, so im not too worried in that respect. its pointless me spending hours and hours poring over different plans and how theyve performed over the years as i just dont understand it. im totally satisfied that the advice to spread my new pot over the above markets is good advice, i just need that bit of help now in how to read the HL site and actually get the investment started.

poolman, thanks for the heads up on that but again, i just wouldnt understand what it was i was reading. i dont even understand the difference between funds and stocks & shares.

thanks