L&G Pension Fund Choice

[orientalorthodox]

Hello,

Could someone help a friend select a pension fund for themselves. They are 37 and have just started the job.

Legal & General offer the following:

• AAA-AA Fixed Int O15 Yr Targeted Duration (PMC) 3
• AAA-AA Fxd Int All Stks Targeted Duration (PMC) 3
• AAA-AA-A Corp Bond All Stocks Index (PMC) 3
• AAA-AA-A Corp Bond Over 15 Yr Index (PMC) 3Suggested by your employer and their adviser
• All Stocks Gilts Index (PMC) 3
• All Stocks Index Linked Gilts Index (PMC) 3
• Asia Pacific (ExJap) Dev Equity Index (PMC) 3
• Asia Pacific Ex Jap Equity Index (PMC) 3
• Asian Income Fund 3
• Bristol University Default Lifestyle Invmt OptionSuggested by your employer and their adviser
• Cautious Managed Lifestyle Profile
• Consensus 10 Year Lifestyle Profile
• Consensus 3 Year Lifestyle Profile
• Consensus 5 Year Lifestyle Profile
• Consensus Index (PMC) 3Suggested by your employer and their adviser
• Consensus Index Lifestyle
• Consensus Index/Over 15 Year Gilts 6 Year LSP
• Consensus Index/Over 15 Year Gilts 7 Year LSP
• Consensus/Over 15 Year Gilts Index 5 Year LSP
• Distribution/Over 15 Year Gilts 10 Year LSP
• Diversified (PMC) 3
• Dual Fund Lifestyle Profile
• Dynamic Diversified Fund (PMC) 3
• Ethical Global Equity Index (PMC) 3
• Ethical UK Equity Index (PMC) 3
• Europe (Ex-UK) Equity Index (PMC) 3
• Gbl FW 50:50 Cur Hgd/AAA-AA-A CorpBond LSP
• Glb Eq 50:50 /Consensus 10 Year LSP
• Glb Eq 70:30 Index/Over 5 Yr IL Gilts 5 Yr LSP
• Glb Eq FW 50:50 Index/Over 15 Yr Gilts 11 Yr LSP
• Glb Eq FW 50:50 Index/Over 5 Yr IL Gilts 6 Yr LSP
• Glb Eq MW 30:70 Idx 75% Cur Hgd/AAA-AA-A CrpBnd LS
• Glb Eq MW 30:70 Idx 75% Curr Hedged 10 Yr AVC LSP
• Glb Eq MW 30:70 Index 75% GBP Cur Hedged 10 y LSP
• Glb Equity FW 50:50 Idx/Over 15 Yr Gilts 10 y LSP
• Glob Eq 70:30/Over 15 Yr Gilts 5 Year Lifestyle
• Global Eq FW 50:50 /Over 5 Yr IL Gilts 11 Yr LSP
• Global Eqty Fixed Weights 50:50 Indx (PMC) 3Suggested by your employer and their adviser
• Global Eqty Fixed Weights 60:40 Indx (PMC) 3
• Global Equity 70:30 Index (PMC) 3
• Global Equity 70:30 Index Lifestyle Profile
• Global Equity 70:30 Index/Fixed Interest LSP
• Global Equity 70:30 Index/Index-Linked Gilt LSP
• Global Equity Fixed Weights 50:50 Index Lifestyle
• Global Equity FW 50:50 Index/Fixed Interest LSP
• Global Equity FW 50:50 Index/Property 10 Yr LSP
• Global Equity FW 50:50 Index/Property 7 Yr LSP
• Global Equity FW 50:50 Indx/Over 15 y Glts 5 y LSP
• Global Equity FW 50:50 Indx/Pre-Retiremnt 7 y LSP
• Global Equity FW 50:50/Pre-Retirement 10 y LSP
• Global Equity FW 60:40 Indx 10 y Lifestyle Profile
• Global Equity FW 60:40/Fixed Interest 5 y LSP
• Global Equity FW 60:40/Over 15 y Gilts 5 y LSP
• Global Equity Market Weights 30:70 Index (PMC) 3
• Global FW 50:50 Idx GBP Currncy Hedgd (PMC) 3
• Japan Equity Index (PMC) 3
• L&G (PMC) 2015 - 2020 Pathway Fund 3
• L&G (PMC) 2020 - 2025 Pathway Fund 3
• L&G (PMC) 2025 - 2030 Pathway Fund 3
• L&G (PMC) 2030 - 2035 Pathway Fund 3
• L&G (PMC) 2035 - 2040 Pathway Fund 3
• L&G (PMC) 2040 - 2045 Pathway Fund 3
• L&G (PMC) 2045 - 2050 Pathway Fund 3
• L&G (PMC) 2050 - 2055 Pathway Fund 3
• L&G (PMC) 2055 - 2060 Pathway Fund 3
• L&G (PMC) 2060 - 2065 Pathway Fund 3
• L&G (PMC) Future World Fund 3
• L&G (PMC) Future World Multi-Asset Fund
• L&G (PMC) HSBC Islamic Global Equity Index Fund 3
• L&G (PMC) Newton Real Return Fund 3Suggested by your employer and their adviser
• L&G (PMC) Standard Life Global Abs Return Strat 3Suggested by your employer and their adviser
• L&G (PMC) Threadneedle Dynamic Real Return Fund 3
• L&G (PMC) Workplace Pathway Fund - 2065 - 2070 3
• L&G Cash 3Suggested by your employer and their adviser
• L&G Dynamic Bond 3
• L&G Growth 3
• L&G High Income 3
• L&G PMC Artemis Income 3
• L&G PMC Distribution 3
• L&G PMC Equity 3
• L&G PMC European 3
• L&G PMC F&C Responsible Global Equity Fund 3
• L&G PMC F&C Responsible UK Income Fund 3
• L&G PMC Far Eastern 3
• L&G PMC Fixed Interest 3
• L&G PMC Global Real Estate Equity Index 3
• L&G PMC Henderson Diversified Alternatives 3
• L&G PMC Index-Linked Gilt 3
• L&G PMC International 3
• L&G PMC Janus Henderson Preference & Bond Fund 3
• L&G PMC Kames Ethical Equity 3
• L&G PMC Kames High Yield Bond 3
• L&G PMC Kames Strategic Bond 3
• L&G PMC Lazard Emerging Markets 3
• L&G PMC M&G PP All Stocks Corporate Bond 3Suggested by your employer and their adviser
• L&G PMC Majedie UK Equity 3
• L&G PMC Managed 3Suggested by your employer and their adviser
• L&G PMC MFS Meridian Global Equity 3
• L&G PMC Newton Global Income 3
• L&G PMC North American 3
• L&G PMC Property 3Suggested by your employer and their adviser
• L&G PMC Stewart Investors Asia Pacific Leaders 3
• L&G PMC Stewart Investors Glbl Emrg Mkt Ldrs 3
• L&G PMC Threadneedle Global Select 3
• L&G PMC Threadneedle Managed Equity 3
• L&G PMC UK Smaller Companies Index 3
• L&G UK Alpha 3
• L&G UK Recovery 3
• L&G UK Smaller Companies 3
• Legal & General (PMC) Real Income Builder 3
• Legal & General Annuity Lifestyle
• Legal & General Cash Lifestyle
• Legal & General Drawdown Lifestyle
• Managed Lifestyle Profile
• Multi-Asset (PMC) 3
• Multi-Asset Lifestyle
• North America Equity Index (PMC) 3
• Over 15 Year Gilts Index (PMC) 3Suggested by your employer and their adviser
• Over 5 Year Index Linked Gilts Index (PMC) 3Suggested by your employer and their adviser
• Overseas Bond Index (PMC) 3
• Overseas Equity Consensus Index (PMC) 3
• Pre-Retirement (PMC) 3
• Pre-Retirement Inflation Linked Fund (PMC) 3
• Pre-Retirement Inflation Sensitive (PMC) 3
• Retirement Income Multi-Asset (PMC) 3
• Sterling Liquidity (PMC) 3
• Triple Fund Lifestyle Profile
• Triple Index/Pre-Retirement Lifestyle Profile
• UK Equity 5% Capped Passive (PMC) 3
• UK Equity 5% Capped Passive/Bond/Gilts 10 Yr LSP
• UK Equity Idx/Global Equity FW 50:50 Idx 10 y LSP
• UK Equity Index (PMC) 3Suggested by your employer and their adviser
• UK Equity Index 10 Year Lifestyle Profile
• UK Equity Index 5 Year Lifestyle Profile
• UoB Default Lifestyle Investment StrategyYou're already invested in this fund
• World (Ex-UK) Equity Index (PMC) 3Suggested by your employer and their adviser
• World Emerging Markets Equity Index (PMC) 3

ReplyForward

 

[uriel_1]

@orientalorthodox It would be irresponsible to give a recommendation without knowing:

• what your friend's overall retirement provision is
• his risk tolerance - emotional and in terms of required returns
• whether he understands what he is doing with investment

Tell your friend to choose nothing, and instead choose to buy Tim Hale's Smarter Investing in the sidebar.

If he really doesn't want to do any of that research himself, then he may need the handholding of professional advice. But that might be expensive if the amoutns involved are low.

 

[orientalorthodox]

@uriel_1 Hi, Thanks for replying. To reply to your points:

• No provision, this is the start of saving.
• They have no concept of what it means. I would say with 30 years to run, Risk could/should be high?
• They will never look at it.

 

[uriel_1]

@orientalorthodox If they will never look at it, nor have no concept of what it means, then frankly, you should not get involved and leave them with the default.

You don't want to get sued by your friend later down the line when the fund you recommended doesn't perform as well as you claimed it might.

 

[graces]

@orientalorthodox Unless they're happy to start doing some research into investment, I'd suggest sticking with whatever default fund they've been put in.

The advantage of that is it should be a 'lifestyling' fund which shifts away from equities towards bonds as they get older without them having to take any specific action to do that. Right now it'll be mostly in equities, with some bonds, and a bit of a bias towards the UK.

If they were to choose an investment from that list, the lifestyling element goes away and they need to manage it themselves over the years, which can get very risky as retirement approaches. It doesn't sound like they want to do that.

 

[therealwitness2027]

@orientalorthodox You want a low cost fund (tracker not actively managed) and you want high equities (at least 80%, probably 100%) as they are still 20 years away from retirement. Avoid anything that is less than 70% equities as this is too risk adverse and avoid anything with a total fee/cost of more than about 0.7 or 0.8% in total.

A number of funds here would be okay based on the above - something like World (Ex-UK) Equity Index (PMC) 3 would be a good option in my opinion.