Pension Consolidation Questions

[AC43]

I've finally got round to establishing where my various pensions pots are and how much they are worth.

I'v got an ISA on the case reviewing them all (I have 5 in total) and he's going to look into the ins and outs of closing one of more and doing some consolidation.

He asked if I had any preference for the type of investment going forward which IIRC fall into three categories;

1 Automater Trackers
2 Stock Pickers
3 Wealth Management

I'm tempted to just go for medium risk Tracker as that seems to me to offer reasonable returns at minimum cost.

Any thoughts?

[JulianPH]

Trackers are a good low cost way to buy the markets.

As for risk levels, this will depend upon how long you have until retirement and what you plan to do with the money at that point (flexible income drawdown or annuity).

The longer you have to go the greater the equity exposure should be and you can reduce this as you approach retirement by increasing bond exposure.

If you want to drawdown income throughout your retirement you should still have a quite strong equity exposure to facilitate this and keep in line with inflation.

If you want to buy an annuity then you should gradually move to a very high bond exposure to protect what you have built up to date.

Your IFA should be going over all of this in detail with you as they are going to be taking quite a chunk of your combined pensions in adviser fees. Look at keeping them down as there is no point lowering the cost of the investment if this is swallowed up with high adviser fees.

It is the ongoing annual fees that end up costing the most.

Cheers

[AC43]

JulianPH said:

Trackers are a good low cost way to buy the markets.

Thanks for the rapid detailed response!.

My logic on Trackers was based on the fact that a lot of fund managers are being replaced by automated algorithms these days.

JulianPH said:

As for risk levels, this will depend upon how long you have until retirement and what you plan to do with the money at that point (flexible income drawdown or annuity)

The longer you have to go the greater the equity exposure should be and you can reduce this as you approach retirement by increasing bond exposure.

12 years to go. I'm tempted to go for some growth over the next, say 5 years them maybe throttle back a bit.

JulianPH said:

If you want to drawdown income throughout your retirement you should still have a quite strong equity exposure to facilitate this and keep in line with inflation.

If you want to buy an annuity then you should gradually move to a very high bond exposure to protect what you have built up to date.

Haven't figured this bit out yet (have only just had an initial phone briefing). At the moment the working assumption is that I'll have a pot of a certain size paying out at roughly 4% pa

JulianPH said:

Your IFA should be going over all of this in detail with you

Yes, next step

JulianPH said:

as they are going to be taking quite a chunk of your combined pensions in adviser fees. Look at keeping them down as there is no point lowering the cost of the investment if this is swallowed up with high adviser fees.

It is the ongoing annual fees that end up costing the most.

Ah....good point! I'm off to get my windscreen replaced today. Will have a good read of the fees & T's&C's.

Thanks!

[JulianPH]

No problem!

You need to get a break down of all the fees, that is to say the trackers (including dealing fees), the platform they sit on and the adviser charges.

Give me a shout if I can be of any further help going over these with you and good luck with the windscreen!

[AC43]

JulianPH said:

No problem!

You need to get a break down of all the fees, that is to say the trackers (including dealing fees), the platform they sit on and the adviser charges.

Give me a shout if I can be of any further help going over these with you and good luck with the windscreen!

Thanks Julian :-)

New windscreen is going in now so I'll shortly have the pleasures of driving through France with a brand snaking new chip-free screen. In the last couple of weeks I've polished it, I've waxed the wheels, I've had a couple of buckled rims sorted, I've had 4 wheel alignment done and have the air con re-gassed.

Nothing like a road trip to get me to sort all the niggled :-)

[JulianPH]

AC43 said:

Thanks Julian :-)

New windscreen is going in now so I'll shortly have the pleasures of driving through France with a brand snaking new chip-free screen. In the last couple of weeks I've polished it, I've waxed the wheels, I've had a couple of buckled rims sorted, I've had 4 wheel alignment done and have the air con re-gassed.

Nothing like a road trip to get me to sort all the niggled :-)

No problem, enjoy the road trip!