How many pots?
Discussion
Hi,
I currently have my workplace pension with Atlas and a separate private one with Vanguard. Both set for equity to try and maximise initial compound interest during the earlier stages (age 34).
How many pension pots do people intentionally use? I guess relying entirely on the workplace pension might be a risk? But surely any market crashes would equally impact the separate vanguard private pension?
Thanks,
I currently have my workplace pension with Atlas and a separate private one with Vanguard. Both set for equity to try and maximise initial compound interest during the earlier stages (age 34).
How many pension pots do people intentionally use? I guess relying entirely on the workplace pension might be a risk? But surely any market crashes would equally impact the separate vanguard private pension?
Thanks,
Edited by DickP on Friday 29th December 10:37
I don't think there's a single "right" answer to this as some people will have changed jobs lots and just left the small workplace pots from each employer whilst some people will have either not changed jobs lots or will have consolidated their pensions.
£100K in a single pension pot will perform the same as 10x £10K pension pots if they're all invested in the same thing.
The number of pots doesn't really matter so much as the fees you're paying and the investments themselves.
£100K in a single pension pot will perform the same as 10x £10K pension pots if they're all invested in the same thing.
The number of pots doesn't really matter so much as the fees you're paying and the investments themselves.
People seem to keep asking this one. I like to keep things simple and just have two, a SIPP and whatever workplace pension comes with the current job.
Once you move jobs then consolidate the previous work pension into the SIPP. The last one took less than a week to complete, with virtually zero effort as the SIPP provider handled it all.
Some people make periodic partial transfers from their work pension to SIPP along the way, but to be honest you can usually find low cost tracker funds for either stocks or bonds in most work pension schemes nowadays. So it is easy enough to maintain a suitable asset allocation at low cost across your pension portfolio.
Once you move jobs then consolidate the previous work pension into the SIPP. The last one took less than a week to complete, with virtually zero effort as the SIPP provider handled it all.
Some people make periodic partial transfers from their work pension to SIPP along the way, but to be honest you can usually find low cost tracker funds for either stocks or bonds in most work pension schemes nowadays. So it is easy enough to maintain a suitable asset allocation at low cost across your pension portfolio.
- I'm talking all Defined Contribution pensions here, Defined Benefit is a whole different discussion.
I’m in my 40s and have two. I’ve had 3 employers since I left school so when I left the first two jobs I was able to move them to my SIPP where I now manage it on the same platform as my savings.
My current employer manages my pension (although I have the option of various risk appetite depending on your age) and they’ll supposedly remove some risk as I get older.
So, I have two. I make the maximum contribution allowed on the work one and top up my SIPP to gain the tax benefits .
My current employer manages my pension (although I have the option of various risk appetite depending on your age) and they’ll supposedly remove some risk as I get older.
So, I have two. I make the maximum contribution allowed on the work one and top up my SIPP to gain the tax benefits .
DickP said:
Hi,
But surely any market crashes would equally impact the separate vanguard private pension?
The difference is you can move the Vanguard SIPP into cash with a few clicks. But surely any market crashes would equally impact the separate vanguard private pension?
Edited by DickP on Friday 29th December 10:37
WPP might not be so easy.
So in the event of a black swan you could in theory reduce the impact of a crash.
Your question is wider than just pension I think.
Ideally you’ll be building an isa alongside which gives you more flexibility.
How many individual pension pots you have is only relevant from an admin point of view.
It may be worth looking for a single platform provider to take advantage of reduced fees at a given investment size. This isn’t a recommendation but Fidelity, for example, drop their percentage fee above £250k holdings and you get access to some free advice. This is isa and sipp combined so could be worth having everything combined to take advantage.
Ideally you’ll be building an isa alongside which gives you more flexibility.
How many individual pension pots you have is only relevant from an admin point of view.
It may be worth looking for a single platform provider to take advantage of reduced fees at a given investment size. This isn’t a recommendation but Fidelity, for example, drop their percentage fee above £250k holdings and you get access to some free advice. This is isa and sipp combined so could be worth having everything combined to take advantage.
trickywoo said:
Your question is wider than just pension I think.
Ideally you’ll be building an isa alongside which gives you more flexibility.
How many individual pension pots you have is only relevant from an admin point of view.
It may be worth looking for a single platform provider to take advantage of reduced fees at a given investment size. This isn’t a recommendation but Fidelity, for example, drop their percentage fee above £250k holdings and you get access to some free advice.
Their wealth service is good as far as it goes but doesn't give financial advice - however you can pay for one of their in-house IFAs if you want it.Ideally you’ll be building an isa alongside which gives you more flexibility.
How many individual pension pots you have is only relevant from an admin point of view.
It may be worth looking for a single platform provider to take advantage of reduced fees at a given investment size. This isn’t a recommendation but Fidelity, for example, drop their percentage fee above £250k holdings and you get access to some free advice.
gotoPzero said:
DickP said:
Hi,
But surely any market crashes would equally impact the separate vanguard private pension?
The difference is you can move the Vanguard SIPP into cash with a few clicks. But surely any market crashes would equally impact the separate vanguard private pension?
Edited by DickP on Friday 29th December 10:37
WPP might not be so easy.
So in the event of a black swan you could in theory reduce the impact of a crash.
WayOutWest said:
gotoPzero said:
DickP said:
Hi,
But surely any market crashes would equally impact the separate vanguard private pension?
The difference is you can move the Vanguard SIPP into cash with a few clicks. But surely any market crashes would equally impact the separate vanguard private pension?
Edited by DickP on Friday 29th December 10:37
WPP might not be so easy.
So in the event of a black swan you could in theory reduce the impact of a crash.
Jumping on this thread
Have just left my first workplace after 10 years, have a reasonable pension pot
Started a new workplace pension with my new employer obviously although still waiting on paperwork to access the portal and check fund options etc
I guess I have 3 options
1) Leave the old pension where it is and manage it as a pot that will not have anything more added to it
2) Transfer it to the new workplace pension pot assuming they allow it
3) Transfer it to a SIPP
Am I right in thinking that the key things to consider are fees and the funds I have access to in each option?
SIPP is likely to come with more fees but also potentially more fund options?
Have just left my first workplace after 10 years, have a reasonable pension pot
Started a new workplace pension with my new employer obviously although still waiting on paperwork to access the portal and check fund options etc
I guess I have 3 options
1) Leave the old pension where it is and manage it as a pot that will not have anything more added to it
2) Transfer it to the new workplace pension pot assuming they allow it
3) Transfer it to a SIPP
Am I right in thinking that the key things to consider are fees and the funds I have access to in each option?
SIPP is likely to come with more fees but also potentially more fund options?
I have 6: 1 DC pension, 1 SIPP, 2 IRA’s, 1 401k and 1 Swiss 3rd Pillar. My wife has 4. I know this seems a trivial factor in relation to your question but it is a nightmare have so many pots. If I could lump them all into one big pot I would do it in a heartbeat, but sadly it can’t be done. Timing withdrawals and figuring out optimising taxes, just record keeping is horrible and the older I get the more difficult this will become. When we shuffle off, our executor will have a full time job on their hands.
My advice would be to keep it simple if you can.
My advice would be to keep it simple if you can.
Consolidated 12 pots between my wife and I into two SIPPS then kept workplace each, and changed fund choice to mimic that of other investments.
Didn’t really look into the terms and conditions too deeply as none of them were particularly large so weren’t ever going to be life changing if I could access some at 55 vs 57.
Didn’t really look into the terms and conditions too deeply as none of them were particularly large so weren’t ever going to be life changing if I could access some at 55 vs 57.
Another thing to bear in mind is that the last time I looked Vanguard didn’t offer drawdown so your options on retirement are more limited than some other providers.
Not too much of an issue at your age, though; you can always build up a pot with Vanguard and transfer later if need be.
Not too much of an issue at your age, though; you can always build up a pot with Vanguard and transfer later if need be.
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