L&G pension fund advice for a novice investor

[janjan]

Hi, I’m after some advice on a good L&G pension fund to invest in. My workplace salary sacrifice pension is held with L&G so I’m limited to the funds on offer from them. I can log in and change my investments easily but I’m not knowledgeable enough to confidently choose a fund/funds yet. I currently have all my pension invested in the default fund which is the ‘L&G PMC Multi-Asset 3’.

I am currently 39, I have £52k in my pension pot (only been contributing about 9 years as I did a fair bit of job hopping and contract work prior). I contribute 7% of my £50k basic salary and my company contributes an extra 10%.

My goal is to retire prior to state pension age so understand I may need to invest in some higher risk funds. I’m also going to look at a S&S ISA, probably through vanguard. Obviously this will be seperate to my pension.

Any advice appreciated……

 

[spreadinglove]

@janjan I'm about 80/20 L&G PMC World (ex UK) Equity Index Fund 3 & L&G PMC Global Equity Market Weights (30:70) Index Fund- GBP 75% Currency Hedged 3

0.12/0.14 fund management charge, it's 100% equity, with UK basically correctly weighted, and a hefty amount hedged. YMMV, but this felt the best finger in the air allocation to me.

 

[shadow2]

@janjan That default fund is only 39% equities, with 2 decades to go until retirement you'll probably want more exposure than this.

Take a look at the guidance in the wiki (start here) and see which passive accumulating global trackers L&G offer.

 

[brievah]

@janjan Depending on your appetite for risk and wanting to take control, you may be able to do a partial transfer out of ur existing arranged to another plan u setup elsewhere like a SIPP.

make senses to not lose ur employer contributions so you could each year empty ur employers plan to transfer into your Sipp to invest as you want if u don't want to limit hr self to internal funds only.

 

[niamh55]

@janjan L&G MT Global Developed Equity Index Fund (Fund ID: BC03) might be worth a look as well.

It is a global developed equity index fund and charges 0.1%, tracking FTSE Developed TR GBP Index

It looks quite similar in composition to L&G PMC World (ex UK)
Equity Index Fund 3

 

[karen1941]

@janjan You definitely could take some more risk with the length of time you have until retirement. Consider some research on investing for the long term.

You should be looking at a 7% return over the period.

I'd advise to use a compound interest calculator to predict where you might be when you do come to retire.

17% of your current salary invested for 20 yrs plus your £52k would give you circa £528k. This doesn't include inflation.

 

[revolutionist90]

@janjan Saving this thread - starting a new job next month and they have L&G pension.

 

[roberto1820]

@janjan L&G International Index Trust has been core of my pension for a few years.

And since COVID I have also contributing 10% of my allocation to L&G Global Health tracker. It has returned less than the global tracker, but sort of a safety net ...

 

[julia736]

@janjan Most of investing is about choosing a suitable allocation of stocks and bonds - probably most of the funds that L&G offer you, or the main ones at least, are just different allocations of these main two asset classes.

Gilts are UK government bonds, REITs are property but they have bond-like characteristics, ignore gold and other commodities. Sometimes people think there's a different between american equities and british ones, but that's a bad way to look at things.

Almost all of investing, for most people, is about understanding the differences between how stocks and bonds behave (in terms of risk, returns, volatility) and then picking an allocation - one that gets them the best returns compatible with being able to sleep at night. Do not delegate this to the plonkers on here - they will not be around to apologise or compensate you if things go wrong. Watch Lars Kroijer's short video series and read his book or Tim Hale's Smarter Investing.

 

[kstar2013]

@janjan https://fundcentres.lgim.com/en/uk/...ica-Equity-Index-Fund/?isin_code=GB00BGYBX458

https://fundcentres.lgim.com/en/uk/...ndex-Fund/?isin_code=GB00BGYBX458#Performance

Obviously comes with risk as they're equity stocks, but they've both been doing OK in the last few years.

 

[janjan]

Thanks for the advice all!