Advisor or DIY?

[Herbie912]

Would welcome some PH wisdom....

Should I take up an advisor's service (using Nucleus and EBI funds) or just go it alone with someone like Interactive Investors and Vanguard Lifestrategy 80? I’m tending towards proper DIY and saving on the fees..

Context

I’m 50 and have circa £1m split across 7 DC pensions (all largely in default funds). The only good thing I did was start early and consistently put in 20% .. otherwise I just left it be, but luckily, I'm in a nice position now.

Finally decided I should prob get some proper advice, which has been useful for cashflow planning etc. Naturally, advice is to consolidate and align funds with risk tolerance - for fees of circa £3K/year for ongoing advice, platform fees of 0.135% for Nucleus and EBI fund fees of 0.32%... not massively expensive but still a chunk out of the pot each year vs going with II and Vanguard or similar.

Thoughts? Other things I should keep in mind here.

[Panamax]

Combine them all into one SIPP on a sensible platform and DIY it.

Depending on what other income you may have in retirement, including State Pension, you may need to watch out for hitting the 40% tax threshold through band creep (fiscal drag, call it what you like). If that's the case, make sure you're planning ahead and use ISA to juggle the tax. i.e. tax free cash from pension shuffled away into ISA if you're not already using the full allowance.

[Simpo Two]

Panamax said:

Combine them all into one SIPP on a sensible platform and DIY it

Subject to the finer details, that's what I'd do.

[trickywoo]

Fidelity have a pension promotion at the moment where a new person transferring to them could get up to £3k.

[GadgeS3C]

Simpo Two said:

Panamax said:

Combine them all into one SIPP on a sensible platform and DIY it

Subject to the finer details, that's what I'd do.

Agreed.

[Herbie912]

Thanks folks - reassuring

Panamax said:

Depending on what other income you may have in retirement, including State Pension, you may need to watch out for hitting the 40% tax threshold through band creep (fiscal drag, call it what you like). If that's the case, make sure you're planning ahead and use ISA to juggle the tax. i.e. tax free cash from pension shuffled away into ISA if you're not already using the full allowance.

Yep, good shout and definitely on my mind ... I should have a full state pension and do have money in ISA/premium bonds etc Will need to figure out where to withdraw from and when to ensure efficient...

trickywoo said:

Fidelity have a pension promotion at the moment where a new person transferring to them could get up to £3k.

Yes, thanks for flagging. Interactive Investor appeals for similar reasons as they have a very similar promotion and their fees are a lot lower than Fidelity iiuc

[chip*]

Herbie912 said:

Yes, thanks for flagging. Interactive Investor appeals for similar reasons as they have a very similar promotion and their fees are a lot lower than Fidelity iiuc

From Feb-26, ii fees will be cheaper if you hold a SS ISA and SIPP as it's cut £21.99 to £14.99 pm.
You get 1 free trade per month, or £1.49 for extra fund trade. You can dump your family and Junior ISA here without any additional cost. My experience of their customer service / response time has been excellent. For an outlay of ~£200 a year, they get a thumbs up from me.

[mikeiow]

Panamax said:

Combine them all into one SIPP on a sensible platform and DIY it.

Depending on what other income you may have in retirement, including State Pension, you may need to watch out for hitting the 40% tax threshold through band creep (fiscal drag, call it what you like). If that's the case, make sure you're planning ahead and use ISA to juggle the tax. i.e. tax free cash from pension shuffled away into ISA if you're not already using the full allowance.

That would be my suggestion too.
Check if there are any “guarantees” - may make one or two worth leaving where they are. Also if any are very small, check the small pots rule. If not, consolidate.

OP, you’ve done very well
Do you have a plan for when you want to retire?
If it is before you can access pensions, you might want to have some ISA funds to access. May even be worth filling those up more from now - might give you the ability to remain in a lower tax band but pulling more income, especially in your “go-go years”

Also put some thought to how you will spend your time when you join Team Unemployable. Everyone spends time looking at the money side, but few spend serious time thinking about how they will spend their days!

On the State Pension, do check you are not just reading the big number when you login to see. That will always show you the maximum you *can* get: the smaller font number below confirms what you *will* get given current contributions

[Herbie912]

Thanks again to everyone for tips/contributions. PH is awesome..

mikeiow said:

That would be my suggestion too.
Check if there are any guarantees - may make one or two worth leaving where they are. Also if any are very small, check the small pots rule. If not, consolidate.

No guarantees (unfortunately) on current pensions - one of the things advisor checked as part of fixed fee review. Wasnt aware of small pots rule - will keep in mind!

mikeiow said:

Do you have a plan for when you want to retire?
If it is before you can access pensions, you might want to have some ISA funds to access. May even be worth filling those up more from now - might give you the ability to remain in a lower tax band but pulling more income, especially in your go-go years

Pondering this one more and more every day. I’m thinking of stopping full-time work somewhere between now and 55. Have circa £325K in cash/investments between wife and I. Wife is 55 and has circa £350K in DC pension plus very small civil service pension so between cash and wife’s pension we can bridge a gap to my pension. Only thing holding me back is looking out for the kids (one at uni and one at sixth form but unlikely to go to uni).

mikeiow said:

Also put some thought to how you will spend your time when you join Team Unemployable. Everyone spends time looking at the money side, but few spend serious time thinking about how they will spend their days!

Really good shout - I’ve put most of my life/effort into work, so I really need to figure this out. Plenty of things I can tinker with but I definitely need some new hobbies. I'm also thinking about volunteering.

mikeiow said:

On the State Pension, do check you are not just reading the big number when you login to see. That will always show you the maximum you *can* get: the smaller font number below confirms what you *will* get given current contributions

Just double checked and ok here.

Thanks again to everyone for contributing - super reassuring/helpful all round.

[NortonES2]

do you currently get any pension contribution from an employer? if so don't transfer that pension to a SIPP as you will probably lose that,

[Herbie912]

NortonES2 said:

do you currently get any pension contribution from an employer? if so don't transfer that pension to a SIPP as you will probably lose that,

Good shout - I do, but very small, as I've just joined a new employer ... in theory, the new gig should be super interesting, but in reality, it is all a bit tame. Nice to have the money, but can't help think there is more to life (part of the pondering here).

[Jon39]

chip* said:

From Feb-26, ii fees will be cheaper if you hold a SS ISA and SIPP, as it's cut £21.99 to £14.99 pm. ...

Beware of any percentage uncapped fees.

You could have (say) a £1m S&S ISA with A J Bell and your monthly charge is £3.50.
There are other providers with caps.

The obvious reason why uncapped fees are a scam, is because the work involved to provide the service, does not increase as a portfolio value increases.

Barclays is one ISA provider that has ever increasing monthly percentage fees.
Over the long- term, it can have has a surprisingly detrimental effect.

[mikeiow]

Herbie912 said:

NortonES2 said:

do you currently get any pension contribution from an employer? if so don't transfer that pension to a SIPP as you will probably lose that,

Good shout - I do, but very small, as I've just joined a new employer ... in theory, the new gig should be super interesting, but in reality, it is all a bit tame. Nice to have the money, but can't help think there is more to life (part of the pondering here).

50 is a good age to be seriously contemplating your next phase, & your pensions look in good shape.

I went to 4 funerals when I was around that age….it certainly sharpened my focus on stepping away from the coalface (okay….keyboard!)

50s and 60s can also be years when things start to hurt, break, stop working properly…..so I would always recommend doing what you can to improve lifestyle/health/fitness
Mind you, I’m on the second cuppa in bed ‘cos our delivery got cancelled & it’s cold outside, so what do I know

[opm]

Without wanting to hijack your thread, in a similar position myself with 5 different pensions from different employers, question is though I am looking at consolidating my pensions but surely its easier to just put them into your workplace pension as isn’t it normal for big employers anyway to have negotiated a low fee on it which you still keep even after retirement?

[Herbie912]

opm said:

Without wanting to hijack your thread, in a similar position myself with 5 different pensions from different employers, question is though I am looking at consolidating my pensions but surely its easier to just put them into your workplace pension as isn t it normal for big employers anyway to have negotiated a low fee on it which you still keep even after retirement?

Great add to topic. My understanding (from initial advisor advice) is that workplace pension might be limited on fund choice and limited on options for withdrawal methods when retiring - seems to be the case for me, so looking at consolidating onto a new platform

Would be good to hear others thoughts here..

[Herbie912]

opm said:

Without wanting to hijack your thread, in a similar position myself with 5 different pensions from different employers, question is though I am looking at consolidating my pensions but surely its easier to just put them into your workplace pension as isn t it normal for big employers anyway to have negotiated a low fee on it which you still keep even after retirement?

Great add to topic. My understanding (from initial advisor advice) is that workplace pension might be limited on fund choice and limited on options for withdrawal methods when retiring - seems to be the case for me, so looking at consolidating onto a new platform

Would be good to hear others thoughts here..

[fat80b]

Herbie912 said:

opm said:

Without wanting to hijack your thread, in a similar position myself with 5 different pensions from different employers, question is though I am looking at consolidating my pensions but surely its easier to just put them into your workplace pension as isn t it normal for big employers anyway to have negotiated a low fee on it which you still keep even after retirement?

Great add to topic. My understanding (from initial advisor advice) is that workplace pension might be limited on fund choice and limited on options for withdrawal methods when retiring - seems to be the case for me, so looking at consolidating onto a new platform

Would be good to hear others thoughts here..

Check the fees and fund options.

I have a work-negotiated-discount on an old standard life pot that is quite good. I've kept that one going.

I've had several others since where the fees were not competitive (c~1%) and I've moved these out as soon as practical. I've gone for a self-managed Vanguard (other platforms also available) pot where I can choose the funds and fees that I think work best for me.

The fees are sigificantly lower than the schemes that they were in previously and the Vanguard platform gives me the fund choices that I am happy with at the fee level I am OK with.

[mikeiow]

Herbie912 said:

opm said:

Without wanting to hijack your thread, in a similar position myself with 5 different pensions from different employers, question is though I am looking at consolidating my pensions but surely its easier to just put them into your workplace pension as isn t it normal for big employers anyway to have negotiated a low fee on it which you still keep even after retirement?

Great add to topic. My understanding (from initial advisor advice) is that workplace pension might be limited on fund choice and limited on options for withdrawal methods when retiring - seems to be the case for me, so looking at consolidating onto a new platform

Would be good to hear others thoughts here..

Well, I would ask this: how many fund choices do you want to choose from?

Our work fund was Aviva (who of course acquired many different pension schemes - ours was originally Skandia, then Friends Provident, then Friends, finally Aviva!).

Inside it had about 80 funds.

My preference is a low cost global fund (watch 30 minutes of Lars to see why!), & they had that.
I also have a tilt to US Tech (career), so had some in an American fund.
Also dabbled with a couple of small other options over the years - they have a few multi-asset ones.

Costs are always key: they are the only things you can control.
Our work fund (now my retirement fund!) was (& is) very low cost, & one main reason I’ve not bothered moving it…..& a reason I consolidated 3 small pensions many years ago. A simple task to do yourself, especially when companies are part of Origo Options.
Do check they don’t have any guarantees before moving them.

[alscar]

When my old employer froze the old DB scheme and started a new DC one they also went via Aviva having started the move with Winterthur and then Friends Life.
25 Fund choices including trackers but the company also offered a default “ lifestyle “ option which apparently 99% of the company went for.
The small print made it clear that the Funds being offered separately were all under active management the annual cost of which was significantly higher ( percentage points as opposed to a fraction of a percentage ) than the default BUT the company would pay those as a consequence of stopping the DB scheme.
Less than 10 people ( from 1000 )apparently went for the non default option and the returns over the period were farcically better.
Not sure what that says other than a general lack of knowledge about Pensions and perhaps a general willingness to be both “ lazy “ and not wishing to cause the company additional payments !

[AndyAudi]

Herbie912 said:

I m 50 and have circa £1m split across 7 DC pensions (all largely in default funds).

Thoughts? Other things I should keep in mind here.

State pension age - most funds or many existing are restricted to being drawn at the earliest of 10 years before state pension age. Check if any of your old funds(pre 2006) have a fixed protected age, so you might not want to give that up by consolidating if you plan retiring before 57 (58?)