Lord Edgingtons "Get Rich Slowly" Stocks and shares bonanza

Mr Loathsome

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I currently have 50k sitting in Standard Life...from a time opting out of Serps so long ago that I`d forgotten about it until recently.

It`s in two funds, one closed, and the bottom line is that together, after charges, guaranteed returns are 3.3 % ( Plus any with-profits bonuses)

I intend to retire in 5-7 years.

I have spoken to a Financial Advisor, but decided to leave it where it is....whilst he confirmed that it was a poor return, he did not fill me with any confidence in his ability to do better, once the transfer charges and his higher yearly commission rate are deducted. Especially over such a short time span.

Without getting deep into the whole business of Risk Aversion, etc, I`d be really interested in the personal views of the knowledgable people on this thread, if any of you can be arsed.

Should I REASONABLY expect a better return than this? Would any of you be confident in doing better, if you were investing it yourselves?

You should reasonably expect to do better if able to take more risk. With profits will provide modest returns, but there will be fewer bumps along the way when cushioned by bonuses. Typically, they are a bit crap though and won’t even beat a cautious equivalent.

Go for any mainstream equity fund and in the long term the returns will be far better. You will also have more ups and downs along the way. This isn’t necessarily good if you are retiring short term.

Where this pension pot fits in the context of your broader plans for retirement will significantly dictate how much risk you are sensibly able to take.

I’d point out that the value of a financial adviser, should be the insight offered in terms of matching any investment planning with your broader circumstances. They are not necessarily investment ‘experts’ beyond being able to match you with a sensible investment for your risk profile.
 

Bardas

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3.3% guaranteed return actually sounds quite decent after deductions etc.

Picking something popular like the Vanguard LifeStrategy % funds the least risky(20%) looks to have returned slightly more over the last 5 years I.e about 23.5% vs 17.5% in yours. The more riskier the funds though with more equity have returned better (I.e. 60% fund returned about 46% over those 5 years, whilst 100% equity returned 71%).

so yes you could have made more but only by taking risks and the last few years have been another bull run that no one can tell when it will finish. The main question is what you intend to do with it at retirement. 5-7 years is a shortish time frame where you should be trying to de-risk if you need to take that money out in one go(in conventional logic anyway). But if you are planning on using it to supplement other income or savings then you could regard it as having a longer term outlook if you were going to keep it invested and look at something riskier if you could tolerate it may go up and down along the way. In a higher risk it would only take a few years of below par or negative returns coupled with you drawing on it to eat away at the pot.

did the advisor offer anything at all on other suggestions? You did the right thing not wanting to pay the extra fees to be honest, that’s another way to eat into smaller pots quickly. You may be able to access things like Pensionwise or some employers may offer access to advice.

Not really offering much there frankly but in a volatile market 3.3% guaranteed might be a decent return. At least it’s going up which is a win, just not as good in a bull market where the riskier funds would have returned 3x more potentially but you can’t rely on history!

I`ve given a great deal of thought to this, and the Advisor ( who was through Pensionwise) has spent hours on the phone to me. In some ways, of course, he is hamstrung in what he can say, or indicate. This is precisely why I asked for PERSONAL OPINIONS.

I intend taking the money as cash, and leaving my LGPS untouched when it comes to a lump sum, for the obvious reasons. It`s important for me to spend a couple of years travelling around the world when I retire..it`s always been a life goal.

For those who think it`s a lot of money, and are surprised I have left it alone, be aware that I gave up the right to a higher state pension decades ago for this..a gamble that has paid off...and it was NOT 50 k when it started back in the 80`s....and was only 9k in the year 2000. The majority is investment earnings. The joys of long term investment..It`s survived the financial crash AND Covid! I left it alone because it was a long term investment for when I retire, AND I also took ( and sold for cash) shares out of it in around 2006 when Standard Life was demutualised.



Thank you again Jake....I had come to the same conclusions as you, but wanted confirmation that I had made the right choice. Given my circumstances and needs, I feel happier after reading your post.
 

Realistic

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I`ve given a great deal of thought to this, and the Advisor ( who was through Pensionwise) has spent hours on the phone to me. In some ways, of course, he is hamstrung in what he can say, or indicate. This is precisely why I asked for PERSONAL OPINIONS.

I intend taking the money as cash, and leaving my LGPS untouched when it comes to a lump sum, for the obvious reasons. It`s important for me to spend a couple of years travelling around the world when I retire..it`s always been a life goal.

For those who think it`s a lot of money, and are surprised I have left it alone, be aware that I gave up the right to a higher state pension decades ago for this..a gamble that has paid off...and it was NOT 50 k when it started back in the 80`s....and was only 9k in the year 2000. The majority is investment earnings. The joys of long term investment..It`s survived the financial crash AND Covid! I left it alone because it was a long term investment for when I retire, AND I also took ( and sold for cash) shares out of it in around 2006 when Standard Life was demutualised.



Thank you again Jake....I had come to the same conclusions as you, but wanted confirmation that I had made the right choice. Given my circumstances and needs, I feel happier after reading your post.
I'm not criticising you, buddy, good luck to! I was only surprised that you'd forgotten you had £50,000 hidden. For most people (not footballers and the rich) fifty thousand pounds is a lot of money. I would never forget I had an amount like that, no matter, though.

On your investment company that turned £9000 into £50,000, they did very well for you. That's around 10% a year for twenty years if you work it out as compound interest, so they must have risking it a bit, but it obviously paid off.

Large hedge funds are now invested in making a slight relative loss, I believe, because of the effectively negative base interest rate. If you've got £50,000, why not get a buy to let on a terraced house and rent it out. The house won't go down over the long term, it never does.
 

Bardas

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I'm not criticising you, buddy, good luck to! I was only surprised that you'd forgotten you had £50,000 hidden. For most people (not footballers and the rich) fifty thousand pounds is a lot of money. I would never forget I had an amount like that, no matter, though.

On your investment company that turned £9000 into £50,000, they did very well for you. That's around 10% a year for twenty years if you work it out as compound interest, so they must have risking it a bit, but it obviously paid off.

Large hedge funds are now invested in making a slight relative loss, I believe, because of the effectively negative base interest rate. If you've got £50,000, why not get a buy to let on a terraced house and rent it out. The house won't go down over the long term, it never does.

It`s a little more complex..I was keeping it brief. It was 9k when I checked it last, in about 2006, and as I mentioned it formed part of my state pension and wasn`t to be messed with.
But I remained opted out of SERPS for a few more years without realising it..when I had very high earnings..and as the payments continued unseen (out of my National Insurance ) another 8k went in. So a total investment of 17k ( none of which was noticed by me day to day) has actually risen to 50k, an increase of 33k.

Believe you me, I`m far from the only one. There has been some concern that Gov might step in and tax this, but the latest thinking is that they don`t want to penalise people for making good pension decisions decades ago, it would be a very poor incentive.

As I`m over 55 though, I must admit it has been a very pleasant surprise to know that I could draw on it now if I really wanted or needed to, but I`d be taxed on anything over 25% of the amount.

If I leave it until after State Pension age, when other pensions are taken into account ( LGPS, and another smaller PP I`m paying into now, in which i`ve opted for higher risk investments) I can probably take all or most of it without tax liabilities.

This is why taking it out now for property would not be a great idea.
 

pnewortham

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There's a shocking amount of people who haven't got a clue what their pensions or investments are worth, or forget that they they've even got one. If you've worked all your live, moved jobs, paid into various schemes, not paid a huge amount of attention to it, it's easy to lose track after 30 or 40 years.

Financial guys (IFAs and the like) get this all the time - digging into peoples' financial histories to see what forgotten pots are lying around.

There's all kinds of government and private schemes that allow people to start tracing this stuff. It's extremely common.
 

jakehake

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There's a shocking amount of people who haven't got a clue what their pensions or investments are worth, or forget that they they've even got one. If you've worked all your live, moved jobs, paid into various schemes, not paid a huge amount of attention to it, it's easy to lose track after 30 or 40 years.

Financial guys (IFAs and the like) get this all the time - digging into peoples' financial histories to see what forgotten pots are lying around.

There's all kinds of government and private schemes that allow people to start tracing this stuff. It's extremely common.
There seems to be a wealth (pardon the pun) of companies popping up to trace old pensions at a fraction of the cost of an IFA so unless people really think they’ve lost a lot let the cheap companies find your pensions then if need be move them to where is cheaper to hold them. Avoid paying financial advisors unless you have complex affairs
 

pnewortham

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There seems to be a wealth (pardon the pun) of companies popping up to trace old pensions at a fraction of the cost of an IFA so unless people really think they’ve lost a lot let the cheap companies find your pensions then if need be move them to where is cheaper to hold them. Avoid paying financial advisors unless you have complex affairs
A lot of the time it's the estate of a deceased person trying to track it, so probate can often dictate who to use / what process to follow.

But on the general point, you make wise words.
 

jakehake

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A lot of the time it's the estate of a deceased person trying to track it, so probate can often dictate who to use / what process to follow.

But on the general point, you make wise words.
Probably lucrative for the HM Government if pensions can’t be traced. Even lodging a will seems an onerous and still archaic process.

Envelopes and cheques only and a process that takes weeks or months
 

pnewortham

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Probably lucrative for the HM Government if pensions can’t be traced. Even lodging a will seems an onerous and still archaic process.

Envelopes and cheques only and a process that takes weeks or months
Isn't there a fixed dormancy period for unclaimed pensions? 6 years or something. Then it gets passed on to good causes through the lottery. Or did I make that up..??
 

giro

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The average UK pension pot is about £60k so I’d say anything less than that could be classed as smaller pots. Not sure what the issue is was just highlighting that fees and advisors will eat into smaller pots quicker than a bigger pot if things aren’t going up in the market.

As for what is a bigger pot that’s more subjective. Everyone has their own lifestyle that they want to try and fund, I’m sure we’d have people on here who’d be grateful with £50k and others who’d rather aim for £200k or £500k etc. That’s their choice.

You’re still allowed to give a shit about other people and not vote Conservative even if you do alright for yourself you know. There is no rule that compassion has to go out of the window nor are you expected to forego all material goods
That’s pretty scary! You’d only get a annual pension of circa £3k, on top of your state pension. You won’t be living too “high off the hog” unless you have considerable other sources of income.
 

jakehake

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Isn't there a fixed dormancy period for unclaimed pensions? 6 years or something. Then it gets passed on to good causes through the lottery. Or did I make that up..??

Think depending on scheme it can be 6 or 10 years then it goes to the country coffers. Was googling about the lottery stuff and that’s seems to be either a plan or going through at some point to redivert into that pot which I guess is a better place . Looks like it will be pensions, insurance policies and some other stuff not covered by the existing bank account legislation that scoops those up
 

jakehake

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That’s pretty scary! You’d only get a annual pension of circa £3k, on top of your state pension. You won’t be living too “high off the hog” unless you have considerable other sources of income.
Hence why the Govt panics every now and again when they realise what they have engineered for people. Workplace pensions are the latest sticking plaster. They are technically a good thing but I think they will just ensure more people have that a average pension pot rather than actually increasing the average pension pot which would be more useful.

though once they get everyone having a decent personal pension pot they’d just start tinkering with the state pension entitlement. Everyone gets caught in the end
 

jcfartpants

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Hmmmmm..........I have two conundrums and would be grateful for any advice.

1. Is it worth getting a Financial Advisor and how can I be sure the person is completely independent?

2. I think I should be turning to shares as my ISA returns have dried up and I've started pulling them out. But, I only want to invest in ethical funds.

I've done some research but to be honest I'm finding it a minefield and don't want to spend money on an IFA and fees to share platforms that may take me a while to get back. So at the moment a fair proportion of my savings are sat in my current account whilst I prevaricate on what to do.
 

jakehake

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Hmmmmm..........I have two conundrums and would be grateful for any advice.

1. Is it worth getting a Financial Advisor and how can I be sure the person is completely independent?

2. I think I should be turning to shares as my ISA returns have dried up and I've started pulling them out. But, I only want to invest in ethical funds.

I've done some research but to be honest I'm finding it a minefield and don't want to spend money on an IFA and fees to share platforms that may take me a while to get back. So at the moment a fair proportion of my savings are sat in my current account whilst I prevaricate on what to do.
Unbiased is meant to be the register for IFAs I think. Independent is a wooly word as they will generally always have a platform they choose to use to manage their investments for clients. Probably as long as that platform has access to all the market then you know they aren’t pushing you into a silo of Funds like a St James Place FA would steer you into their funds

On point 2 don’t pull funds out of ISAs as you lose the tax shelter effectively. Best off transferring them into a S&S ISA instead this saving the tax shelter but allowing you to use shares and funds instead. Ethical is a minefield at present as multiple companies will slap an ESG sticker on a fund even if it isn’t technically “ethical” in everyone’s eyes

individual shares are a lot of effort and risk to track or find the right one. Index investing is technically the safer route and hedges bets so if you can find an “ethical index” that suits your purposes then finding a fund tracking that index is the simpler/lower cost way to do it I guess.

quick Google has brought up this list which is a starter I guess and has a few options to bumble around and decide if the ethos of the fund is sound
 

outreacher

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I might be old fashioned but, I have been investing in gold when it's low, happy enough with that not lost anything yet, and the value keeps going up. I just keep my eye on the gold price and look for the slumps.
 

outreacher

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I was also investing in watches and books form Europe, but stopped now buying from auctions in overseas, because the import charges are not clear anymore, I like real stuff like paintings, prints and items I can look at and I can touch.

Spent a lot of time on Catawiki auction site, but Brexit put paid to that, english auction houses not quite the same. So if I invest in anything has to gold. Still can't help myself looking for prints and books to add to my collection.
 

jcfartpants

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Unbiased is meant to be the register for IFAs I think. Independent is a wooly word as they will generally always have a platform they choose to use to manage their investments for clients. Probably as long as that platform has access to all the market then you know they aren’t pushing you into a silo of Funds like a St James Place FA would steer you into their funds

On point 2 don’t pull funds out of ISAs as you lose the tax shelter effectively. Best off transferring them into a S&S ISA instead this saving the tax shelter but allowing you to use shares and funds instead. Ethical is a minefield at present as multiple companies will slap an ESG sticker on a fund even if it isn’t technically “ethical” in everyone’s eyes

individual shares are a lot of effort and risk to track or find the right one. Index investing is technically the safer route and hedges bets so if you can find an “ethical index” that suits your purposes then finding a fund tracking that index is the simpler/lower cost way to do it I guess.

quick Google has brought up this list which is a starter I guess and has a few options to bumble around and decide if the ethos of the fund is sound
Thanks for that. Yes that's what I thought about IFAs - I just can't bring myself to trust that they're not ultimately independent.

Ref the tax shelter, if I've pulled them out I can still put the max back in each year to a S&S ISA to get the tax benefit though can't I? Am I better off doing that than going for a non-S&S fund? If say, I have 20k to invest?
 

jakehake

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Thanks for that. Yes that's what I thought about IFAs - I just can't bring myself to trust that they're not ultimately independent.

Ref the tax shelter, if I've pulled them out I can still put the max back in each year to a S&S ISA to get the tax benefit though can't I? Am I better off doing that than going for a non-S&S fund? If say, I have 20k to invest?

yeah you can subscribe every year up to the limits to put it back within the tax free limits.

Almost all funds will be some form of stocks and shares or other commodities so it’s all much of a muchness I guess. Only reason not to technically invest is if you intend to take it out in the short term and need the cash as anything invested in funds/stocks is obviously at risk of short or long term drops. If it’s a long term investment obviously that’s less of an issue as the aim is to ride out any corrections. (I think that’s what you asked but if not then ignore me!)
 

giro

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Unbiased is meant to be the register for IFAs I think. Independent is a wooly word as they will generally always have a platform they choose to use to manage their investments for clients. Probably as long as that platform has access to all the market then you know they aren’t pushing you into a silo of Funds like a St James Place FA would steer you into their funds

On point 2 don’t pull funds out of ISAs as you lose the tax shelter effectively. Best off transferring them into a S&S ISA instead this saving the tax shelter but allowing you to use shares and funds instead. Ethical is a minefield at present as multiple companies will slap an ESG sticker on a fund even if it isn’t technically “ethical” in everyone’s eyes

individual shares are a lot of effort and risk to track or find the right one. Index investing is technically the safer route and hedges bets so if you can find an “ethical index” that suits your purposes then finding a fund tracking that index is the simpler/lower cost way to do it I guess.

quick Google has brought up this list which is a starter I guess and has a few options to bumble around and decide if the ethos of the fund is sound
A minefield is definately NOT ethical!😉
 
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