Pension advice
Discussion
So I have a couple of workplace pensions-one very small the other a lot bigger(but not massive)
The smaller one is in Nest and has grown from 5.2k to 6.2k in the last year.
The bigger one seems to be growing very slowly and I have been unhappy with how some of the funds have performed. At least 2 have lost a considerable amount recently.
So I m think of switching everything to nest as their growth rate seems a lot better. Anyone got any do s/fonts on this?
For context the bigger pension is in low 6 figures and I m 54. I’m also naive when it comes to pensions and investing
The smaller one is in Nest and has grown from 5.2k to 6.2k in the last year.
The bigger one seems to be growing very slowly and I have been unhappy with how some of the funds have performed. At least 2 have lost a considerable amount recently.
So I m think of switching everything to nest as their growth rate seems a lot better. Anyone got any do s/fonts on this?
For context the bigger pension is in low 6 figures and I m 54. I’m also naive when it comes to pensions and investing
Edited by helmutlaang on Tuesday 10th February 21:12
agree with Dale. its worth getting some advice. Pensions are not "play money" after all.
Nest does not have a great reputation (both costs and default investment strategy).
Personally I would start by trying to understand
a) what your larger pension is invested in (equity / bonds ratio etc)
b) Active / Passive funds
c) geographic allocation.
d) fund and platform costs.
With that it infp shouldn't be too difficult to form a picture of why it is not performing well in your view (and more importantly how is it performing to a benchmark portfolio of the same equity / bond allocation)
If that sounds beyond your knowledge / comfort zone then deinfitely start looking for IFA recommendations.
IANAFA etc....
Nest does not have a great reputation (both costs and default investment strategy).
Personally I would start by trying to understand
a) what your larger pension is invested in (equity / bonds ratio etc)
b) Active / Passive funds
c) geographic allocation.
d) fund and platform costs.
With that it infp shouldn't be too difficult to form a picture of why it is not performing well in your view (and more importantly how is it performing to a benchmark portfolio of the same equity / bond allocation)
If that sounds beyond your knowledge / comfort zone then deinfitely start looking for IFA recommendations.
IANAFA etc....
Have you selected the investments in each pension or are you taking the default choice?
The default is rarely the best option because the pension provider makes a lot of assumptions about what you need based on little information. This could lead you to being invested in funds that aren't appropriate for you - better historical performance doesn't need mean it's right for you.
My understanding is that the Nest has limited investment choices so think carefully before shifting everything there.
A good place to start is by speaking to Pension Wise. It's a free service:
https://www.moneyhelper.org.uk/en/pensions-and-ret...
In the meantime, you could start considering what your retirement wishes are and then looking at what you need to achieve that.
The default is rarely the best option because the pension provider makes a lot of assumptions about what you need based on little information. This could lead you to being invested in funds that aren't appropriate for you - better historical performance doesn't need mean it's right for you.
My understanding is that the Nest has limited investment choices so think carefully before shifting everything there.
A good place to start is by speaking to Pension Wise. It's a free service:
https://www.moneyhelper.org.uk/en/pensions-and-ret...
In the meantime, you could start considering what your retirement wishes are and then looking at what you need to achieve that.
Thanks all
I chose my own investments around 10years ago. Around 70% is in property which seems to be very volatile.
15yr gilts has seemingly crashed and so has a fund called diversified funds. A couple of other funds seem to have risen by a fair bit which is countering the losses,but the fund as a whole is stagnant.
I think I need professional advice,which is kind of the way I was leaning before posting.
Anyone recommend a IFA in Norfolk?
Thanks.
I chose my own investments around 10years ago. Around 70% is in property which seems to be very volatile.
15yr gilts has seemingly crashed and so has a fund called diversified funds. A couple of other funds seem to have risen by a fair bit which is countering the losses,but the fund as a whole is stagnant.
I think I need professional advice,which is kind of the way I was leaning before posting.
Anyone recommend a IFA in Norfolk?
Thanks.
dale-rp1ov said:
I d say it s probably worth getting some advice when it comes to pensions as mistakes can be costly.
We don t advice on pensions but my IFA is lovely, so if you want her details just drop me a pm.
How much does your IFA charge?We don t advice on pensions but my IFA is lovely, so if you want her details just drop me a pm.
And how much value of investments does your IFA advise you on?
I ask because IFA costs on relatively small investments could well swallow a whole bunch of costs/growth.
helmutlaang said:
Thanks all
I chose my own investments around 10years ago. Around 70% is in property which seems to be very volatile.
15yr gilts has seemingly crashed and so has a fund called diversified funds. A couple of other funds seem to have risen by a fair bit which is countering the losses,but the fund as a whole is stagnant.
I think I need professional advice,which is kind of the way I was leaning before posting.
Anyone recommend a IFA in Norfolk?
Thanks.
I think you already have the answer to your first question - in your bigger pension you chose funds that have not done well the past ten years (but MIGHT do great the next ten years). I chose my own investments around 10years ago. Around 70% is in property which seems to be very volatile.
15yr gilts has seemingly crashed and so has a fund called diversified funds. A couple of other funds seem to have risen by a fair bit which is countering the losses,but the fund as a whole is stagnant.
I think I need professional advice,which is kind of the way I was leaning before posting.
Anyone recommend a IFA in Norfolk?
Thanks.
In other words there's no evidence that the difference in performance between your two different pension providers is down to anything the provider themselves has done.
I just transferred an old pension to II.
Simple process and cheap as hell.
There are absolutely things to consider like fees and any protected access age or other safeguarded benefits but the actual technicalities of transferring one and choosing a suitable fund shouldn't be super difficult in and of themselves.
Simple process and cheap as hell.
There are absolutely things to consider like fees and any protected access age or other safeguarded benefits but the actual technicalities of transferring one and choosing a suitable fund shouldn't be super difficult in and of themselves.
helmutlaang said:
So I have a couple of workplace pensions-one very small the other a lot bigger(but not massive)
The smaller one is in Nest and has grown from 5.2k to 6.2k in the last year.
The bigger one seems to be growing very slowly and I have been unhappy with how some of the funds have performed. At least 2 have lost a considerable amount recently.
So I m think of switching everything to nest as their growth rate seems a lot better. Anyone got any do s/fonts on this?
For context the bigger pension is in low 6 figures and I m 54. I m also naive when it comes to pensions and investing
Usually best to spread the risk, don't put all your eggs in the same nest.The smaller one is in Nest and has grown from 5.2k to 6.2k in the last year.
The bigger one seems to be growing very slowly and I have been unhappy with how some of the funds have performed. At least 2 have lost a considerable amount recently.
So I m think of switching everything to nest as their growth rate seems a lot better. Anyone got any do s/fonts on this?
For context the bigger pension is in low 6 figures and I m 54. I m also naive when it comes to pensions and investing
Edited by helmutlaang on Tuesday 10th February 21:12
OP. Whatever you do, make sure you understand exactly the real cost of an IFA in the short term and over a long period.
I personally don't understand why you would give them any money when the information is in the public domain from a fiscal point of view and that selecting the right funds isn't that complex if you use a boggo low-fee platform like Vanguard where risk levels are clear as well as time lines, which are even in the name of the funds!
Even basic ChatGTP will massively help or dare I say people on this very forum. It really isn't a complicated question or situation but I appreciate there is always an amount of inertia.
I personally don't understand why you would give them any money when the information is in the public domain from a fiscal point of view and that selecting the right funds isn't that complex if you use a boggo low-fee platform like Vanguard where risk levels are clear as well as time lines, which are even in the name of the funds!
Even basic ChatGTP will massively help or dare I say people on this very forum. It really isn't a complicated question or situation but I appreciate there is always an amount of inertia.
oyster said:
Jasey_ said:
If nest were the last pension company on the planet id stuff my money under my mattress.
I only have a very small pot (1 of 11) in Nest and it s up 70% in 3.5 years.In fact it s one of the best performing pots right now for me.
YMMV of course.
helmutlaang said:
Thanks all
I chose my own investments around 10years ago. Around 70% is in property which seems to be very volatile.
15yr gilts has seemingly crashed and so has a fund called diversified funds. A couple of other funds seem to have risen by a fair bit which is countering the losses,but the fund as a whole is stagnant.
I think I need professional advice,which is kind of the way I was leaning before posting.
Anyone recommend a IFA in Norfolk?
Thanks.
70% in property is a bizarre allocation, what made you think this would be how you should set things up?I chose my own investments around 10years ago. Around 70% is in property which seems to be very volatile.
15yr gilts has seemingly crashed and so has a fund called diversified funds. A couple of other funds seem to have risen by a fair bit which is countering the losses,but the fund as a whole is stagnant.
I think I need professional advice,which is kind of the way I was leaning before posting.
Anyone recommend a IFA in Norfolk?
Thanks.
I don't think an IFA is the answer, learning a bit about asset allocation would be a far more sensible step.
OP, comparing nest to your workplace pension on performance is not meaningful. They are just tax efficient wrappers with a cost and a choice of funds.
This is over simplifying but if you want a tin of heinz beans you can buy them in tesco or sainsburys, same product, maybe a different price. If you bought a tin of Hp beans in tesco and a tin of heinz beans in sainsburys and decided Hp were better, you wouldn't stop shopping in sainsburys!
You need to understand the costs of each pension and the choice of funds, both providers should give you that information.
A bit of investigation and you can decide which funds you want to choose.
If you are still contributing to your workplace pension you may not be able to move it. My workplace pension doesn't allow partial transfers so, I can't move it until I cease to be a member. Note that most workplace pensions are pretty cheap.
Also look at something called lifestyling, some providers will automatically move you into bond/cash funds the closer you get to retirement. You have to tell them not to do that, usually by selecting your own funds from their list. If that is right for you.
You can end up with big numbers in your pension, its worth the effort to understand your options. If I said spend an hour a week reading a dull book but in 3 months I'll give you £5k you'd probably snap my hand off. Thats pretty much what you can do by spending that hour a week on investigation into pensions and your fund choices.
This is over simplifying but if you want a tin of heinz beans you can buy them in tesco or sainsburys, same product, maybe a different price. If you bought a tin of Hp beans in tesco and a tin of heinz beans in sainsburys and decided Hp were better, you wouldn't stop shopping in sainsburys!
You need to understand the costs of each pension and the choice of funds, both providers should give you that information.
A bit of investigation and you can decide which funds you want to choose.
If you are still contributing to your workplace pension you may not be able to move it. My workplace pension doesn't allow partial transfers so, I can't move it until I cease to be a member. Note that most workplace pensions are pretty cheap.
Also look at something called lifestyling, some providers will automatically move you into bond/cash funds the closer you get to retirement. You have to tell them not to do that, usually by selecting your own funds from their list. If that is right for you.
You can end up with big numbers in your pension, its worth the effort to understand your options. If I said spend an hour a week reading a dull book but in 3 months I'll give you £5k you'd probably snap my hand off. Thats pretty much what you can do by spending that hour a week on investigation into pensions and your fund choices.
OP - as has been suggested you re not comparing apples with apples the way your funds are invested.
To some Bricks & mortar - fixed interest gov bonds - cash etc are safe because they understand them, but they are unlikely to outperform other investments or potentially keep up with inflation.
If you were looking to minimise your own involvement I d be tempted to switch the funds you have with the larger provider into a low cost tracker with them (prob be similar to how you are Invested with NEST - (assuming it s cheap annual charges work pensions can be at lower rates that you may lose switching provider)
If you wanted to be more hands on in my view you ll prob manage to do research yourself fairy straight forward without involving an IFA, who ll prob end up costing you money, that on that level of pension fund, you d maybe be slower to make back before your retirement over things you could ve picked yourself.
Nest high charges? I m not going to Knock NEST too much, they re providing a service to low value investors that requires minimum involvement/understanding - they take a cut with a percentage on money going in - which sounds high when you compare to others but in reality most of their investors are not putting high volume/value through. Eg the 1.8% inward fee is about £25/yr on all the contributions for an an employee on about £25k wage Their ongoing charges of 0.3% aren t out of it either. We use it for our family business employees who all earn - £25-40k, so don t feel that if that s the fund you find yourself using now through your employer it s bad or wrong
To some Bricks & mortar - fixed interest gov bonds - cash etc are safe because they understand them, but they are unlikely to outperform other investments or potentially keep up with inflation.
If you were looking to minimise your own involvement I d be tempted to switch the funds you have with the larger provider into a low cost tracker with them (prob be similar to how you are Invested with NEST - (assuming it s cheap annual charges work pensions can be at lower rates that you may lose switching provider)
If you wanted to be more hands on in my view you ll prob manage to do research yourself fairy straight forward without involving an IFA, who ll prob end up costing you money, that on that level of pension fund, you d maybe be slower to make back before your retirement over things you could ve picked yourself.
Nest high charges? I m not going to Knock NEST too much, they re providing a service to low value investors that requires minimum involvement/understanding - they take a cut with a percentage on money going in - which sounds high when you compare to others but in reality most of their investors are not putting high volume/value through. Eg the 1.8% inward fee is about £25/yr on all the contributions for an an employee on about £25k wage Their ongoing charges of 0.3% aren t out of it either. We use it for our family business employees who all earn - £25-40k, so don t feel that if that s the fund you find yourself using now through your employer it s bad or wrong
Edited by AndyAudi on Wednesday 11th February 15:54
Jasey_ said:
Jasey_ said:
If nest were the last pension company on the planet id stuff my money under my mattress.
wait til you try to access your money retiring overseas & cashing it out?)
Compare £20 note under the mattress for 14years to investing in a workplace pension with NEST.
Mattress £20 after 13years
Nest
£20 + £5tax + £15 Employer contribution = £40
£40less 1.3.% charge = £39.48 year 0 invested
After 14years at a reasonable 5.3% growth less 0.3% management fee ie a net 5.0%
£39.48x(1.05)^14
=fund of about £80 (which you could take your £20 back out tax free.
I had to use Nest as an occupational pension for the last 18 months before retirement. I’ve done lots of full and partial transfers of other occupational schemes into my SIPP over the years. Nest was by far the slowest and most difficult to transfer out of. Anecdotally I’ve heard the same from several other people.
Then of course there’s the high cost of contributions. There are much cheaper and better options out there, especially if you look at SIPPs on the investment platforms.
Your choice of funds in the biggest pension does seem odd. No doubt this is the reason for the recent poor performance. If you don’t feel confident making your own investment choices you could choose a ready made pension plan or a target retirement date scheme (eg. Vanguard).
I recommend you do some homework before making any quick decisions.
Then of course there’s the high cost of contributions. There are much cheaper and better options out there, especially if you look at SIPPs on the investment platforms.
Your choice of funds in the biggest pension does seem odd. No doubt this is the reason for the recent poor performance. If you don’t feel confident making your own investment choices you could choose a ready made pension plan or a target retirement date scheme (eg. Vanguard).
I recommend you do some homework before making any quick decisions.
Cabbage Patch said:
Then of course there s the high cost of contributions. There are much cheaper and better options out there, especially if you look at SIPPs on the investment platforms.
For the average man in the street they are not generally worth it, platform fees tend to work out more expensive than one off contribution fees for smaller investors 
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