serious pension advice

Could be worse of course, the Euro's interest rate is AFAIK NEGATIVE and has been for a while? You put money in a bank and they TAKE from it!

Jan 5, 2019 -- 8:01PM, Just Checking wrote:

All I'm really hoping for is say 5-6% average a year. It's amazing to think years ago you could

That's a tough ask, not impossible but not easy either

all my own figures are based on 4%... if I can maintain that then I'm good right up to my late 80's. If I was to live longer then I'd sell up and by a tent

part of my 2 grand a month income target is currently made up of roughly 5 grand a year dividends of out BT shares ,supposed to  safe if no increase for next 2 years but with our luck you no that divi is next to go

£2k with no mortgage or debt is a nice income 1tp

yep most of the time be living on a lot less a month [12 to 1500 ] but nice to no it,ll be there,

it,ll be deffo be there in 9 years anyway the wifes index linked pension and mine and her,s state pensions,any share dividends and anything left in my pot  will be  just a bonus,with me getting my state pension in 6 years its nicely staggered with hers following

Sweet!

I've based my own drawdown on a reduction when I move (no mortgage) and then another reduction when the state pension kicks-in, taking me into my late 80's (as mentioned earlier). The way I've lived my life it would be a miracle if I exceed this.

I,m in contracting and literally 1000,s of lads now on ltd company,umberella schemes, great for now but not building up any NI  contributions paying minimum rates if any, there,ll be squeals a plenty in 3o years time from people expecting the full state pension and not having the contributions in ,

Well I've got my 35 NI years in (37 I think mine is) so should be ok unless they increase it again

yeh mine are in

You also get your pension a year before me... have to wait until I'm 67

?? Unless they opt out (which I think is being done away with) people with Umbrellas or Ltds who pay a salary will be be paying PAYE and NI contributions.
Not sure about Sole Trader who are a bit odd.

The NI level to make it a full pension year isn't actually that high.

Class 2 contributions pay state pension for sole traders. £2.95 pw

was 732 quid in contributions last year for a qualifying year

The sort of people running a ltd will surely cover that. If they tried to give themself no salary and all dividends the tax man would be all over them, and Umbrella people are PAYE anyway.

in the contracting game a lot of people on ltd company are poorly paid and ltd is just a way of boosting the rate up ,going into the y,s and wherefores of NI for something they or might not get in 30,40 years time is not high on their agenda

Hindsight will hurt them

I estimate that a 20 year old today will not get a state pension before 75, if one still exists

todays young kids will probably be estimating the same thing so not bothered about their contributions

But even if they are a director of the company they'll be paying themself PAYE for at least part of their income? Once they hit the threshold NI will come off.
They'll have to employ an accountant to check it over and have to submit a proper individual self assessment tax return ever year so their tax will be checked twice. Have you any evidence of what you're saying or is this just gossip/heresay/theory as I'm not seeing this at all.
I've heard before the "water cooler" talk about how contractors are avoiding tax etc and it isn't true.

my pension has dropped 3% this year.
subprime it tanked 50%!!!!!!!!!!!!!!

but a year later it recouped all its losses!!!!!!!!!!!!

understanding the post crisis and why it recovered is very worrying for britain post brexit.
if you could take all of the funds out and shift it to  a country who will benefit from a hard brexit i would....a german fund

GI if you've an ISA (or outside) there is nothing stopping you pulling out of UK funds and shares and buying foreign shares or funds. I hold foreign shares and funds that are allocated abroad myself.

You could e.g. buy a DAX tracker if you want.

sadly cant take mine out or i would.
i can choose investment areas but would need a long time to research every country to make a good decision.
also bit too busy for that atm.

Jan 5, 2019 -- 7:20PM, Just Checking wrote:

"re annuities, an annuity is pointless unless the expected life for your age is 10 years or less."You mean the exact opposite surely? Nothing you are saying make sense? An annuity is precisely a bet that you'll live longer than the actuaries think you will. Taking one when you are going to die soon is precisely the worst thing you could possible do!!!!!!!!!

by "expected life" I mean what the actuaries expect, and that you aspire to outlive.

which looking at that phrase "expected life for your age" again and the context in the post is perfectly clear.

The largest holdings in the fund apart from (surprise!) SL UK Real Estate are high-yield blue-chip companies.
SHELL
BP
HSBC
RIO TINTO
BAT
GLAXO
Not one of these stocks currently pay dividends below 5% - Tax free in a pension
Over the last nine years, the average performance of the above shares is a modest +16%
Had you split your investment between these stocks nine years ago under the aegis of a SIPP, it would now be worth c £200,000.

If you're wondering where your money has gone, 1st time poster, you may be surprised to find that the "bloke" who facilitated your investment is probably still getting a % of the overall value. The AMC is a modest .65% but the management will be "active" switching in and out of stocks and bills, and you'll be charged twice each time this happens, for the stock bought in your name and the stock sold to balance the purchase, this will be happening weekly.

Your wife has a good pension; you would be better managing your own. You don't have to consult an IFA to switch.

thanks for the interest biscuit but although I,m no financial mug ,setting up my own fund is above my pay grade, I,m afraid

Not at all: I recommend Xafinity simply SIPP. It's easy.

1st time poster, the main work was done 9 yrs ago - it is easy to "take control" of your pension now.
As it happens, I am about to invest a DB pension into my preferred stocks with Xafinity, on Wednesday.
Anyone can designate himself an Independent Financial Adviser. If you happen on a good one, still his advice will be predicated on a) His potential future liability and b) His kickback-club.
If you pick your own horses and other bets, you are competent to pick your own investments, and 98% certain to do better than a "managed" fund.

DM me if you are interested to know how my picks get on.

cheers

^^
you won't be able to invest a DB pension of any significant value without a qualified adviser signing it off.

as the ftse reached record highs last year and has been on a bull since last crash, its depressing in the 1st week of the new year to realise you,ll have to keep on investing for at least the next 2 years with fingers crossed hoping for the best, just to recoup whats gone down the toilet in last 5/6 months.

It's not a DB pension if it is invested in the SL POS.

You're not referring to my DB pension, are you dave?

you said

I am about to invest a DB pension into my preferred stocks with Xafinity

If a DB pension is valued at more than £30k, it can't be transferred to a SIPP without authorisation from a qualified adviser.

Correct.
But 1st time poster doesn’t need to go through a Financial Adviser, which is a bonus.

i havnt read everything on thread..      .but....

if you have no income and a pension pot at age 60
you might speak to them about transferring some of your fund into a tax free wrapper

they may be able to transfer 10k or so a year, using up your tax allowance, because when you
retire you will pay tax on this extra pension...if your state pension takes you over limit.

if you have £150k you can probs switch a quarter straight away too, then 10k a year....which
gives you just over half of your pot tax free at retirement, instead of all of it being taxable less
your 25% lumpa.

just a thought...and i am not qualified to give financial advice, but if you speak to your pension
supplier they may advise pros and cons of this action, or indeed advise you
to seek paid advice




i havnt found a single subject which affects all of us on which so many
folk have had no education

good luck 1st time poster,

you can find out what your future state pension is expected to be via



https://www.gov.uk/future-pension-centre

Donny
my problem Donny is I currently get a 4 day shutdown sat,sun,mon,tues, long hrs which I lift 800 a month,butisnt guaranteed and can stop at a [hone call or restart at a phone call a month later,very flexible and unreliable,but if I do something along the lines of what you say or activiate releasing money from my pot,i,m wasting 2 grand plus a year paying tax if the work continues, so far till the recent falls its worked ok for me and even if the work dried up ive got savings I can use that if needed would get me to 66
obvious problem been using savings whilst pots dwindling aint good news and when does a blip become a problem,then become a serious problem

no probs, didnt know you had some work.

you can review your situation at end of any tax year with your pension co.

its good that you have an interest in your future, hopefully the markets pick up
over next 2 years or so, and your fund does well.

fingers firmly crossed, and keep on top of it!

to be honest as ive said above I,m not a greedy man or have any huge expectations and although annuities are horrendus value I,d get one and top it from savings till state pension kicks in 6 yrs time, but if anything happens to me it leaves the wife short before her state pension kicks in 4 yrs after mine

in that case can you switch pension to a draw down fund?

take 25% tax free thats going to give you £500 or so a month for 6 years, to supplement
your savings and earnings

whilst the other 75% of your fund remains invested however you choose within
your pension, and if the worst happened would be transferred to your mrs,

then when state pension kicks in you can decide if you want annuity or start
taking cash from fund?


remember i aint qualified , but if you like sound of it, you can ask your pension co
in case there are hidden charges or pitfalls

it is utter madness to take out an annuity in your 60s.  You are simply locking in low interest rates for decades.  A complete mugs bet.

Your numbers don't look quite right OP.

.http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0GBR06DZV&tab=13

Although this fund is far from a great performer, it has still achieved growth of 75% over the 9 years you've mentioned. Of course, you're drip feeding some but 50K original investment would be 87.5K less fees.

What are (all) the costs of the fund to you?

I've been out of the game for a few years but it is my understanding that you need an IFA to effect a drawdown.

To give Dave some credit here I worked out that I would need to live to my 90's to break even on current annuity rates and the death benefits are not so great either. Safe, yes, but my own personal circumstances proved that drawdown was best for me.

On the flip side, drawdown is also dangerous in the wrong hands

No IFA needed for drawdown (if not a DB obv). Need to be on a platform that offers it though.

That depends who you're dealing with Cider... some companies will not accept drawdown without an IFA, Prudential certainly don't

Yup, it's not a legislative requirement though. Just need to transfer to a platform where you can drawdown.

Dangerous without professional advice though, especially when some get wind of the fact they can draw what they want, which is one of the reasons I think the government lightened up on the rules, for a hefty intake of tax

There's a risk of paying a huge tax bill! I wouldn't pay a FA or IFA for something I can work out for myself however.

This is a couple of years old now, but still a decent article.

.https://www.telegraph.co.uk/money/special-reports/100000-to-invest-for-inco...

That's you Cider; good to know you are alert to your investments but most are not as astute; I know most of my old clients weren't

That's a fair point Aspro. What I would suggest is that anyone who is competent with numbers and google can identify what they need to know, except in the most complex of situations. If they are clueless with numbers and don't have close friends/family to call on, then perhaps seek out an adviser.

In the OPs case it might well be that exorbitant fees may well have been eroding his gains. Even with fees, the numbers still don't feel quite right.

Totally agree Cider, hence my earlier comments (top of thread). 9 years without growth is criminal but on checking his fund it has a one-star rating so perhaps its just a bad investment strategy from Standard, which was very unlike them back in the 80's & 90's. Within 5 years of retirement I would be looking at low-risk only; no point chasing that close to the wire.

With 5 years left I took out a medium to low risk investment with Zurich (no fund details) and then with 2 years left I transferred back to a with-profits to pretty much lock-in what I had until drawdown. Although it does jump (rarely but it does happen) it has ticked over at a steady 5.5% over the past 5 years and I'm confident I will maintain at least 4% (which is what my withdrawals are based upon) going forward.

The initial transfer was from a DB scheme; kids off-hand, no wife to take it off me; it was a no-brainer

Although this fund is far from a great performer, it has still achieved growth of 75% over the 9 years you've mentioned. Of course, you're drip feeding some but 50K original investment would be 87.5K less fees.

You're right Cider, there appears to be missing quite a lot of 1sttimeposter's money. Curious.

Cider, have you got the right fund? I looked this up the other day and it wasn't the fund from your link

It has a one star rating on one of the sites, but has still achieved circa 6.4% annualised growth. So something is not adding up.

In wider terms, as you'll know Aspro it's about two things really, your attitude to risk, and fees. Lower risk is lower reward, but less likelihood of needs to access the funds at a lower rate than invested.

I'm looking to FIRE, personally.

My intention will be to keep my pots almost entirely in equities. The possibility in doing so rests with achieving a pot large enough that my withdrawal rate is a low one (at least to begin with).

The largest 'threat' (aside from building a large enough pot) is changes to legislation. Which is outside of all of our control. Will I get a state pension, will there still be a TFLS option, will you still be able to drawdown etc etc. It's currently mooted that I won't be able to access my pension at 55 like people can now. However, there's nothing one can do about these possibilities, all you can really do is work toward existing legislation.

Jan 8, 2019 -- 4:39PM, Aspro wrote:

Cider, have you got the right fund? I looked this up the other day and it wasn't the fund from your link

There appears to be a couple of these SLI type funds with very similar names. If 1tp confirms the unit price today we can clarify exactly which fund it is.

I too have heard that the 55 is increasing; it was a pain when it increased from 50 to 55. I was within spitting distance and had to wait another 5 years, although with hindsight I actually benefitted more from it. The state pension is sure to increase and it was only a few years ago that they increased that from 30 to 35 years.

A confirmation of fund would certainly help as I wasn't looking at the retail one

I'm bang in the sweet spot for increases unfortunately, and the goal posts have moved from 65 to 68 already! If I'm lucky enough to get that far. The suggestion is that pension access will be restricted to 10 years before state pension age.

That would make sense

This video is over an hour long, but I highly recommend it.

.https://www.ifa.com/indexfundsthemovie/

With dinner about to start and Spurs playing tonight I will watch it another time, but I will admit that it is refreshing to see individuals taking the bull by the horns. I sincerely hope you exceed your expectations and based on your posts to date, I have no doubt you will.

Thanks Aspro. COYS!

Indeed!

Interesting thread. I'm self employed and I wish I'd started a pension much earlier than I did

on the plus side we,ve gone up best part of a grand since having a moan,
the rest doesn't mean a lot to me
SL SLI dynamic distribution pension fund
unit price 178,095[ they were 182 plus for the last few years ]
average cost 1,.3% or seems to show about 15 quid a month

that's 72,712,562 units
bit more info plan is already in drawdown as I took 18 grand out of it8 yrs ago to pay mortgage off, which left 50 grand in drawdown which give me 271 quid a month which comes in my bank one day and goes out the next reinvested in the plan, according to the plan that's been £42,321, so I have 2 plans one crystalised one isn't, which leaves both plans adding to 130 grand and £20,528, available as a tax free lump

not sure whether it shows the plans doing ok but ive noticed that for the ist time the original roughly 50 grand pot that funded the 271 quid a month has fallen below the original 5o grand ,only just 49 grandish

I also top the reinvested 271 up to £400 in total per month with the tax relief

Unit price nine years ago was 100 according to:

http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0GBR06DZQ&t...

before anyone gets excited I also transferred 30 grand into fund from a stakeholder pension when I was made redundant about 3 years ago

I contracted out of serps in the late 80s and the contributions are in a Phoenix Life Pension, my intended retirement date is June 2019.

I actually retired last year and will get the state pension in March 2020.

I have a few SIPPS with Hargreaves Lansdown.

I went into drawn down on one sipp last year and took the 25% cash and also withdrew £11,850 to use up my tax free allowance 2018/2019

I will also withdraw for the 2019/2020 something similar less the 2 months state pension that I will receive for that year to use up the TFA of £12,500

Yesterday I received an estimate of what my serps pension fund from Phoenix Life will be worth in June 2019 which is £67,219

I have read the explanation leaflets and from what I can gather, I can transfer this pension in its entirety in June to my HL SIPP. My MVR free date is June 2019.

A couple of questions,

Can I take 25% tax free cash from Phoenix Life and transfer the remaining 75% to HL Sipp or do I transfer the lot to HL Sipp and take the 25% tax free cash when I put the SIPP into drawdown with HL. I am a bit worried that in future years the Government may abolish the 25% tax free element so may put it into draw down in the next year and just not draw as I do not need the money as yet.

Will I need to pay for  professional advice? ( I do not want advice)

Any cash I get will go into Isa's in my name and my wifes to use up the 20,000 annual allowance.

My sipp and isa's are invested mainly in investment trusts with some individual share holdings. They cover Japan, China, USA,UK and Europe.

I'm a bit out if touch, but IIRC taking the 25% is putting the funds into drawdown (albeit taking no income), so that would involve some sort of "process" with Phoenix that may or may not involve charges (and you would have to check whether HL will accept a fund in drawdown).  You should be able transfer the entire fund to HL without advice unless there are some guarantees and then take the 25% if you want.

Cheers 1tp.

This looks like this is the correct fund here .https://markets.ft.com/data/funds/tearsheet/charts?s=GB00B3K62F76:GBX

So it's officially called Standard Life Investments Dynamic Distribution Series 4 Pension Fund

This was around 1.00 when you started now 1.78 so 78% in 9 years. That's 6.62% annualised.

well that doesn't look or sound to bad and about where I was promised when I set off down this road, just disappointing when the twice a year your keep a look out coincide with its high/low spots, stick with it for next year or two

mrc

Assuming Phoenix Life is not yet crystallised my understanding is that you can transfer the whole fund into your SIPP, and then go into drawdown if you wish. You receive 25% tax free on the drawdown amount you decide and the rest goes into a separate fund which you can take income from. All income from that fund is then subject to income tax at your marginal rate.

Possible there will be a transfer fee from PL. HL will be able to give you specific advice on the mechanics of the transfer etc for no charge.

Jan 8, 2019 -- 7:51PM, 1st time poster wrote:

well that doesn't look or sound to bad and about where I was promised when I set off down this road, just disappointing when the twice a year your keep a look out coincide with its high/low spots, stick with it for next year or two

The fees are not extortionate, and the performance is not terrible (though it is at the bottom end).

If I was you I would consider a globally diversified index fund that's passive with low management and platform fees. Your fund is very heavily weighted/exposed to the UK. And it's too expensive for the performance it has delivered.

By investing in this way, the Fund aims to achieve exposure to a diversified portfolio of generally sterling denominated assets

thanks for the advice

No worries. Have a look at L&G Multi Index, HSBC Global Strategy or Vanguard Lifestyle Strategy (there are other alternatives). All have funds as I've described above with various risk options. With platform and management fees added together you should be able to get the overall fees below 0.5%. Plus, reduce exposure to the UK.

Dave and Cider thanks

Phoenix do not do draw down

Hopefully there will not be a transfer fee

I think the best thing is to transfer the lot to my HL SIPP and then decide when I want to take the 25%

Assuming Pheonix is DC mrc? If it is DB with a transfer value of 30K+ then it will require an IFA to provide formal advice.

will be DC as funded from NI rebates - only issue (very unlikely) is if a guaranteed annuity rate is on offer.  Phoenix hoovered up a lot of other companies and some of these offered guarantees even on simple money purchase plans.

If it has a GAR he'd probably want to keep it (if health ok etc)

as I said above he won't be able to TV without advice if there is a GAR.  (It is v unlikely that there will be one.)

There is no GAR

Should be reasonably straight forward then, albeit some of the old school operators are incredibly antiquated. I recently had to populate a 7 page document just to switch funds within my workplace scheme

The government are looking into creating a pensions 'hub' where you can view everything online in one place. I'm not holding my breath

Thanks

GOT SOME INFO back about my funds performance on a volatility scale of 1 to 7 ,7 been high my fund is considered mid range at 4 and the unit price throughout the year was
10 jan 2018  192
21 march 2018  182
10 aug 2018  192
25 dec  2018  175
10 jan 2019   180

At a bit of a loss to understand how the fund has managed not to make you any money - your original £50k investment at 100p should have gained £40k on its own, unless you have taken money out of it.

1TP I realise it's easier said than done, but try not to assess performance over such a short time frame. We've effectively had a bull market for 9 years up to this last year, so some 'correction' is to be expected. Nobody can time the market perfectly, the test is to stay firm in the 'down' time (and not get excited in the 'up' time). I'd look at it as an opportunity as you're buying units 'cheaper' (assuming you're still contributing). The main thing to review (imo) is that your fund is very domestic heavy.

"At a bit of a loss to understand how the fund has managed not to make you any money "
I said this much earlier. His fund is listed with a growth chart and it's been doing ok, it should have made him decent money.

bit more info plan is already in drawdown as I took 18 grand out of it8 yrs ago to pay mortgage off, which left 50 grand in drawdown which give me 271 quid a month which comes in my bank one day and goes out the next reinvested in the plan, according to the plan that's been £42,321, so I have 2 plans one crystalised one isn't, which leaves both plans adding to 130 grand and £20,528, available as a tax free lump

cider right , I take 27o from one side of the fund crystalised  fund, comes in my bank one day and goes out the next withy me topping it up and tax relief ,making £400 going into the un crystalised side of the fund, so there roughly now
49 grand crystalised
81 grand uncrystalised ,
sorry for any confusion,so basicaly 50 grand oif it will only stay roughly the same or hopefully decrease slightly