Do you even know what’s going on in your pension?

puppyHere’s a question for you:

Who is responsible for your pension?

Now, if you answered “errr, don’t know” or “my financial adviser” or “I think its an insurance company”, then that’s pretty normal.  But its the wrong answer.

The correct answer is that YOU are responsible for your pension!

I’ve noticed that even people who think of themselves as savvy savers and obsess about their other investments somehow neglect their workplace pension.

Like a puppy, a pension is for life. Its not something you ignore after they send you the paperwork in the first week of your new job. Neglect is abuse. And that’s bad.  😦

Who else is gonna look after your puppy for you?  You may be thinking that your employer has an obligation to look after your best interests and steer you in the right direction pension wise.  Wrong.

You may be thinking that the government will make this all happen for you. Wrong.

You may be thinking that your financial adviser has your back on this. Wrong, wrong, wrong.

This is on you. Your workplace pension should eventually be one of your biggest assets. It could easily end up worth more than your house. Do you know where your house is and what goes on in there?

Errrr….hopefully you do.  So why not your workplace pension?

You need to know what’s going on in your pension. So its time for you to turn detective and figure this stuff out…

1: Get the facts

dragnetYou need to get the facts.

This means either getting the paperwork or getting access to your pension platform online. For example, do you have the factsheet for the fund(s) your pension is currently being invested in?

If you haven’t got this, get it. If in doubt, ask your HR manager how / where you can get this information.

Don’t be fobbed off.  Does Sherlock Holmes stop solving mysteries just because the HR Manager is out of office on another diversity awareness course?

No, he does not.

2: What’s the deal?

OK, now read the basic information. Do you understand it?  What are the key elements of the deal?  Could you explain it to a 10 year old child?

Most pensions now are defined contribution schemes. In other words, you (should) know what goes in and gets invested, you just don’t know how much it will be worth in the end.

If you’re in a defined benefit scheme (where you know you’ll get a pension of £X per year), you can skip down to section 7. For everyone else, here’s what you need to know:

  • how much is your employer contributing?
  • how much are you contributing?
  • what fund(s) are you investing in?
  • what fees are you paying?

Look for any element of match funding (i.e. the employer matches your contributions) as its crazy not to get the maximum contribution from them that you can.  Do you just walk past free money lying on the pavement?

(hint: the correct answer here is no)

Not putting enough in to get the full employer match funding is like walking past £50 notes lying on the floor without bothering to pick them up.

And then there are the tax benefits. Pensions are the most tax-efficient investment vehicles there are. They’re even more tax efficient than an ISA. Generally, there are no guarantees and no free lunches in life…but pensions do give you free money.

If you’re a 40% taxpayer, everytime you put in £6,000 the government tops this up to £10,000.  That’s £4,000 of free money right there. Where else can you get a return of 67% per year guaranteed by HM Government?

This £4,000 of free money comes in 2 parts:

i) your platform / administrator claims cash for your pension scheme from the government (no paperwork required from you) and

ii) a reduction in your tax bill at the end of the year (for which you need to complete a tax return).

You should be saving something into a pension. Even if you intend to retire at 40 and don’t like that you can’t get your hands on the money until you’re 57. Even if you’re worried the government might move the goalposts. So yes, you are allowed to pay down debt and / or fill your ISA first…but after that, if you can save more, you should be saving something into a pension.

3: Choose an asset allocation

If you ignore that form from HR, your hard earned money will get chucked into a default option.  They’ll probably put you into a “balanced” fund that contains lots of expensive bonds that yield next to nothing because that’s the “safe” option.

Safe for them, perhaps. After all, its not their money. Safe for long term investors saving for retirement? Not so much.

Let’s be optimistic.  No, really, you should be….everything is fucking marvellous and you’re probably going to live to 85+.  So you’ll be investing for long term returns and ignoring short term volatility.  If you’ve been following this FI stuff for a while, you’ll know you wanna be either 100% or mainly in shares.

At this point someone usually pipes up about something about having your age in bonds etc etc. I prefer Jim Collins rule of thumb about asset allocation: people working towards financial independence have 100% of their portfolio in shares (plus an emergency fund of cash). Later, once you’ve quit working, you include a 25% bond / cash allocation to act as a portfolio stabiliser.

Shares (or equities) are slices of ownership in companies.  And, thanks to the magic of capitalism, every year companies get better at making products, services and profits.  This is why shares have historically delivered the best returns.

But what if something disastrous happens to the UK economy?  Well, that’s why you need broad geographical diversification.

4: Choose a fund

You probably have a range of funds to choose from. One key choice is active versus passively managed index funds.  Active means expensive. Passive index trackers consistently outperform active funds after the impact of fees.   Most active fund management reminds me of the parable of The Emperors New Clothes.

Why not keep things simple with a single low cost global equity index tracker?  Something like the Vanguard All World ETF (VWRL).  Vanguard is the only large fund management group that is owned by, and run for, the customers.  That means low fees.  VWRL costs 0.25% per year. Why pay more?

If Vanguard are not available on your pension “menu”, then you can look for a similar low cost, global equities index tracker.  Or maybe you can transfer out (see below).

5: How much to contribute?

Some schemes set the contributions (e.g. employer 10% of salary, employee 5% of salary).

If you have more flexibility to vary your contributions then you can contribute an amount up to the lower of £40,000 or your earnings each year…in general you should invest as much as you can, subject to the constraint that it will then be locked up until 57 (55 if you’re 47+). For money that you need to access before then, you can invest £20,000 per year tax free into a shares ISA.

The beauty of monthly contributions to a pension from salary is £ / $ / € cost averaging, meaning that your investment is “dripped in” over time and over different market conditions.

6:  Consider a SIPP

Will your employer pay their contributions into a self invested pension plan (SIPP)? These can be significantly cheaper (in terms of lower fees) and provide better choices versus a corporate scheme.

However if your employer won’t pay its contributions into a SIPP (and will only pay into the corporate scheme) then you should stay in the corporate scheme. Never leave free money on the table.

Having a SIPP in addition to a corporate scheme is also an option. You can then use the SIPP for squirrelling away any annual bonuses etc.

You can use this handy Monevator table to help you choose a SIPP provider.

7. Advanced options

When I was working, I was able to move my pension pot from my employer’s scheme to a SIPP which allowed me to halve the fees I was paying.

Even if you need to stay in your workplace scheme to keep getting employer contributions, its worth checking whether you can make partial transfers out to a SIPP, thereby gaining control and cutting fees on the bulk of your portfolio.  You can see a helpful post on this from RIT here.

A SIPP also allows you to consolidate pension pots from prior jobs.  This is often a smart move because 1) the fees on those schemes may be ridiculously high 2) you regain control over investment choices and 3) having everything in one place reduces admin and simplifies planning.

One of the things that really helped me gain comfort that I knew what was going on with my pensions, was to consolidate them all in a single SIPP where I could see what I was invested in and what I was being charged in fees.

Its easy to transfer defined contribution schemes into a SIPP.  You just instruct your SIPP provider and they handle all the paperwork and do the chasing.  If your old provider messes you around and drags their feet, you can call in an airstrike via a complaint to the Financial Ombudsman.

Those of you with private sector (not government employer) defined benefit schemes need to know that its possible to transfer out. You could cash in and transfer to a SIPP and manage your money yourself.  Get a transfer value (free) from your pension administrator that will tell you how big the cash amount would be. It’s not for everyone (you’re bearing more risk).  But this worked well for me. You can read a helpful post about this here.

8. Conclusions

Why bother?

Are you joking? The difference between a shitty, high cost pension and one that’s low cost and invested right is enormous.  Fees can add up to huge amounts of money over time.  And when it comes to fund management and platform fees, you get what you don’t pay for.

Investing an hour or two getting this shit sorted out is one of the best investments of time you’ll ever make.

Don’t neglect your pension.

Please note that this is provided for information and is not regulated investment advice. You are free to leave comments but for regulatory and practical reasons I can’t answer questions on what you should do…The Escape Artist has boundaries  🙂

Further reading:


  1. What if you know nothing about investing?
  2. Financial coaching


  1. Any thoughts on the lifetime allowance here… have done some back of the envelope calculations and you don’t need to put that much in to hit/go over it (thanks to compounding and assuming modest stock market growth). At some point (i’m guessing around £3-400k pension for someone with 20+ years before they can access it) you probably want to stop making voluntary pension payments entirely.

    Separately i do worry that the 40% tax break for higher earners will get replaced at some point soon with a flat structure so am currently prioritising SIPP payments above any other form of saving etc.

    1. Beetlegirl · · Reply

      Re life time allowance….. check out the info on the HL web site…. it’s my understanding that the “test against life time allowance” occurs when certain transactions occur on your sipp…. eg taking a tax free lump sum…..The value of you sipp or sipps does not trigger this test……. interesting reading which is not straight forward…….

      1. Thanks Beetlegirl, you are right it is not straight forward.

        My understanding is that the test is triggered every time you withdraw cash from the pension (with another based on hitting a certain age).

        1. Do not get me started on lifetime allowance! If ever a tax was designed to rake in negative amounts of money for the Government this is it.

          Back in the day I was lucky enough to earn some silly money for a few years. So I did as the Government suggested and chucked the excess into my pension plan. Now I near enough have to take it at 55 to minimise the LTA tax. But wait it depends on the market – last month I was over the LTA but with the recent market falls I am under again! Where will I be when I hit 55? I do not know. What I do know is I will stop being economically active when I start taking my pension as I have to dwindle the pot rapidly as the idiots decided to test the LTA twice – once when you first take it and then again for what is left at 75 which could easily breach the limits if you have good investment performance. The LTA only goes up by inflation (and is open to political meddling – it has been reduced several times) whereas you may well see your investments do significantly better than inflation. So, the LTA will mean the Government gets less tax from me over time rather than more. Daft.

          But it is much worse than a few lucky people like me having to retire early. Swathes of well paid public sector workers are also going to retire early. Important people like doctors and senior teachers will fall foul of this idiot tax and decide to retire early. Less income tax from these people and poorer NHS and education. Finally the LTA multiplier for (mainly public sector) DB schemes is ridiculously generous at 20 – It should be nearer 40 for a level playing field but that would make the early retirement problem even worse.

          I think this one ranks as the worst thought out tax I have ever witnessed in my lifetime.

        2. Nelson pk · ·

          Hi PJ,

          it’s not without risk but there might be a way to legally stay below the LTA…by investing in stuff you think will fall in value.

          In your SIPP buy an inverse ETF (ETF goes up when reference index goes down) and at the same time buy the regular version of the ETF outside your pension (maybe in an isa?). Then sit back and wait for the market to move. Technically you have no market exposure so any loses you make in the SIPP will be offset by gains outside it.
          This does assume your reference index is going up 🙂 and There may be some tracking error and likely some fees but it might be something to think about if the money is going to be ‘lost’ anyway.

        3. I like the thought process. The SIPP part is easy to do. The problem is the ISA part. I do not have that amount of cash in my ISAs – they are already fully invested in the market – so I would not be able to buy the regular version of the ETF outside of the SIPP – or would have to accept a lower overall weighting of equities across my whole portfolio (in which case I might as well just hold cash in the SIPP.) Or am I missing something obvious here?

    2. David Andrews · · Reply

      I earn just above 40k and I’m trying to establish if I can pay the entirety of my salary into a SIPP. I’m mostly interested in taking my earnings to just above the lower earnings limit so I can take myself out of income tax and national insurance entirely. I have enough saved so I could draw down my savings for 10 years whilst making maximum contributions to my pensions.

      1. I think you can. But I believe you only get the income tax and not the NI. But if you are young beware the LTA! 40K invested in shares in period where returns are well in excess of inflation will soon grow to a very big number.

  2. excellent article and something that I do wonder about however I work for the NHS and don’t believe I have any say in where my pension gets invested unfortunately I don’t even know how much I will get when I reach state pension age (over 40 years away probably). The pension services are very poor at communication with people but have recently set up a website that you can see how much of your lifetime amount you accumulated with a disclaimer of – this may be completely wrong and you can’t sue us for it if you base assumptions around this information. very helpful.

    1. Agreed, I’ve an NHS pension and frankly it would probably be easier to get Kim Jong-Un’s mobile number than it would be to find out what it’s invested in. NHS HR at my trust seems to be the email equivalent of a black hole where answers are never given and even the website refuses to acknowledge me. Really hope my money is going *somewhere*

      1. John chen · · Reply

        I am also in the NHS pension, this is my understanding: the NHS pension is a final salary pension based on your salary and years of service, so it is not invested in anything, it is paid by the government out of general taxation or government burrowing, you can not transfer your NHS pension into an SIPP.

        Hope this helps.


    2. If you’re in Scotland, the most convenient access to ALL your NHS pension details is via SPPA web site –

  3. Hi TEA

    Great post summarising what everyone should know but never seems to get taught (not sure why schoolkids need to know about Geography, History, Chemistry more than they need to know this but they never covered it when I was at school – it’s over 40 years since so things may have changed now but I wouldn’t bet on it)

    I remember talking to a few people when I was still working and pretty much everyone knew Sweet F A, but were quite happy to moan that they were going to have to work until hell freezes over. Even the ones that showed some interest in what I was doing in working to packing it all in at 58 (which I eventually did achieve) soon had that glazed over look that people get when the are thinking it all seems really complicated.

    My workplace was full of People:

    1. who had absolutely no idea that our employer would match upto 7% into a pension
    2. who knew about the matching but didn’t want to sacrifice their latest phone, car, TV etc
    3. who didn’t read their pension statement when it arrived each year therefore had no idea of how much was in their pension (and some people would have a significant sum – like you said probably more than the value of their house as we live where house prices are still affordable to anyone who has a job that pays more than minimum wage
    4. who had no idea what the default fund was and how their money was being allocated (it was a “lifestyle” fund where the equity/bond allocation depended on your age and as they were being so helpful! charged for the privilege.
    5. who wouldn’t know what SIPP means

    The incredible thing was that our company’s core business involved dealing with numbers and costs (although not in the finance section), so everyone should have been easily capable of understanding all the things you mentioned but quite simply couldn’t be bothered because it was complicated.

    While the general population are not educated about how simple it really can be, there is no hope of the majority changing their attitude to pensions (and investing in general).

    Still all anyone can do is what you are doing and trying to open peoples eyes.



  4. Beetlegirl · · Reply

    TEA – great article for those of us in the private sector. Took me a while to get my act together but seeing everything in one place concentrates the ind on the fees that one is being charged…. I would also confirm that moving pension savings out of an employers sipp into my own reduced ,y charges andl gave me more options for investment….. also when the time came to negotiate my exit with HR they had no idea how much I had stashed away which was handy……

  5. Great article, thanks.

  6. sowhendidyoufinish · · Reply

    Thanks TEA. I remember speaker to a former colleague an accountant at the firm he’d never bothered to change out of the ‘universal balanced plain vanilla fund’…and scarily couldn’t see the point…

    Any word on when Vanguard are going to release a SIPP for UK customers. I moved my ISA to them from Fidelity a couple years back. Painless and saved a chunk of change.

  7. ladyaurora · · Reply


    how long did your transfer take?

    im considering moving my personal pension to a sipp to bring down fees should have done it a few years back but what frightens me is being out the market for quiet a few weeks , can take up to 8 weeks they told me to transfer accross,

    VANGUARD SIPP end of 2018 it launches

    1. I’ve done quite a few transfers. Some have taken weeks to complete. But here’s the key point: I have never been out of the market for more than a couple of days on any of them.

      1. ladyaurora · · Reply

        Thank you thats reassuring to know. Were the transfers in specie or cash? Did you know at the time of transfer ?

        1. I’ve done both types of transfer…by definition, with an in specie transfer you are never out of the market!

    2. From memory it took several months to move the old Aegon pension to Fidelity various forms and chasing back and forth…worth it in the end.

      1. ladyaurora · · Reply

        Fidelity is the platform im looking to move to. And mines an old norwich union now aviva pension. So similar situation
        I feel a tad more confident about doing the transfer.

  8. Great article. My employer does pension salary sacrifice and I get back some of the NI they save into my pension. I can definitely recommend this if it is available as it does not require to do a tax return if in a higher rate tax band and it may even put you into a lower tax band. I do not have to do any paperwork at all as all the pension cash comes out before tax is applied. I just have to start shoveling it out of their preferred provider into my preferred SIPP provider!

  9. Survivor · · Reply

    I know this now, but man I wish I knew it when I started work – going back now & able to interpret that pension company paperwork, I see I bled out any actual gains to the provider’s personal sexytimes fund. I remember sitting across a table at work in various office one-to-one sessions with the interchangeable agents’ expressions a mix of eyes glazed with boredom & contempt for the monkey of the moment sitting in front of them. They knew that they just had to run down the clock until you gave up trying to understand what a pension even was, as they ducked answering your questions – with the aplomb of a seasoned politician. So you left with the impression you had on the way in, that the paperwork was written in ancient Greek & not to worry your pretty little head about pensions, to just accept that they were a mystery wrapped in an enigma buried in a scam.

    I lost a decade of potential compounding traction & was basically also working for free for those parasites who I now understand were just closet trackers, but on gold-plated active commissions.

    So, excellent post for those who have a chance today to not get given one up the nought…….

  10. I have a government pension here in the United States and can start collecting when I turn 62. Like many, I ignored diving into the details for years. But about five years ago I got all geeky and read about everything and figured it all out. Actually it wasn’t all that complicated and now I feel like I’m fully prepared to make the right decisions. Your advice in this post is very wise, and everyone should take control of their own pension. In addition, you should feel blessed to even have one these days!

  11. Thanks TEA, this is a great article! I really need to sort out an old Stakeholder from a previous job and move it into a SIPP. As well as change the fund for my current employer’s pension.
    Does anyone have any thoughts (not advice) on the Vanguard Lifestrategy 100% Eq Acc vs. the All World EFT mentioned in the article? Are they fundamentally different in some way, or is it just in the investment balance/percentages?

    1. The Vanguard Lifestrategy 100% Eq has a big “home bias” to the UK. It you compare it to the All World ETF you will notice that it has a bigger wedge allocated to UK stocks.

      1. Thanks John!

    2. FIRE93 · · Reply

      Essentially the LifeStrategy products offered by Vanguard are 0.02% cheaper than the FTSE Global ALL Cap with their ongoing costs. They are also tilted towards the UK by about 25%, conversely the FTSE Global ALL Cap captures the UK at about 6%.

      As for a diversified portfolio in a fund, the LifeStrategy become more interesting to the layperson when you look at the options that are not solely 100% equity, as they rebalance to keep the desired split.

      For someone who wants an 80/20 split for the lifetime of their investment portfolio, all they have to do is buy LS80. Fire and forget. Similarly the Target Retirement funds will rebalance to higher bond weightings as you approach the target date.

      For someone who wants the same allocation but chooses the All Cap fund, they will manually have to buy an appropriate bond fund(s). This could be as simple as the Global Bond Fund offered by Vanguard. But as each fund grows, or declines, the balancing will have to be redone manually by the investor. The OCF should also be considered here.

      Personally, I like the three fund option for equity. Dev. World ex UK. UK all share. Emerging Markets. This lets me keep the UK at its 6%~ weighting, but saves me considerably on the overall OCF vs just buying the Global All Cap. I can also tweak my investments, I may like to have 15% in Emerging Markets for example. Rebalancing for me is done monthly when I buy more of each fund.

  12. Just out of interest you say the Vanguard All World ETF charges 0.25%, yet on their website the total charges (including Transaction fee and Account fee) come to 0.41%. Are you getting round these two fees somehow? If so, how? Getting round these charges is something that I have not been able to fathom out. Can anyone help?

    1. Hi Ken,
      There is no getting around these charges.

      I make it 0.40% and it is worked out like this:
      ongoing charge: 0.25% – this is automatically taken from the fund and so is factored into the return you get.
      account fee: 0.15% – you can pay it from your Vanguard account by selling investments or topping up your account with money. I prefer putting extra money in to cover account fees.

      Regards, Pinch

  13. Hi Pinch,
    Thanks you very much for that. The reason I’m asking is that I read a post from Monevator giving details of online brokers and how to save fees by investing through them. I got the general gist of the advice and whether it’s best to use flat fee or percentage brokers, but it wasn’t clear just what fees were or weren’t included. For example, taking Vanguard again, if I invested through a broker would I still pay the full Vanguard fees plus the brokers fees. Obviously not I think, but which fees would be waived by going through a broker. A worked example would have been nice.
    Apologies if this sound like basic stuff but before I invest I think I should get this right.
    Cheers, Ken

    1. I use Vanguard directly for investing smaller sums but have moved most of my other fund holdings to iweb – There is an account opening fee of £25, a dealing fee of £5 (for buying or selling) but no platform charge. This will save the 0.15% Vanguard annual platform charge, which will obviously be more and more significant over time.

      1. Thanks Alan. So, if I understand you correctly,what you are saying is that when your holdings reach a level where the 0.15% Vanguard fee is greater than the iweb fee(s) then that is the time to move. I reckon that would be around the £40K mark. Is the 0.15% fee the only charge to be saved by going to an online broker? Is the £25 account opening fee per fund?
        Regards Ken.

    2. Hi Ken,
      Let’s say you open an Stock & Shares ISA account with AJ Bell – charges can be found here –

      Account Fee (Custody Fee)
      For holding shares (including investment trusts, ETFs, gilts and bonds) they will charge a custody fee of 0.25% – maximum £7.50 per quarter = maximum £30 per year. In order to max out the fee and have it capped at £30 per year your portfolio value needs to be £12K or higher.

      They will charge commission per purchase – £1.50 per purchase if you’re dealing via their regular investment facility (bulk day – 10th of each month or next working day thereafter). Let’s say you purchase monthly – 12 x 1.5 = £18.00 in total for the year.

      No tax payable on purchases of Vanguard All World ETF within the ISA.

      Total direct costs to be paid to AJ Bell = £48.00 per year currently at a maximum.

      Ongoing Charge
      You will also “pay” the ongoing charge of 0.25% for this ETF – as mentioned above this is automatically taken from the fund and so is factored into the return you get and you will not have to hand over any money.

      Now let’s look at Vanguard…

      Fees & Charges:

      Account Fee
      For holding shares (including investment trusts, ETFs, gilts and bonds) they will charge an account fee of 0.15% on amounts of up to £250,000 and free thereafter, so on larger investments your annual account fee is capped at £375.

      By the looks of it they don’t charge commission to purchase this ETF according to this page (

      From the page: There’s no brokerage fee for bulk deals – this is where we aggregate deals and bulk-trade at set dealing points during the day. If you’d rather trade at an intra-day price, you can use our Quote & Deal service for a competitively priced £7.50 per deal.

      In order to keep it comparable let’s say that you’re also going to use the bulk days at Vanguard and that you therefore won’t pay commission.

      I expect this to be the same as AJ Bell – No tax payable on purchases of Vanguard All World ETF within the ISA.

      Total direct costs to be paid to Vanguard = Account Fee according to portfolio value.

      Ongoing Charge
      You will also “pay” the ongoing charge of 0.25% for this ETF – as mentioned above this is automatically taken from the fund and so is factored into the return you get and you will not have to hand over any money.


      Let’s take the £48 maximum fee per year charged by AJ BEll as benchmark.

      In order to be charged £48 at the lower Vanguard rate of 0.15% your portfolio size would need to be around £32K – until it is at this size Vanguard would be cheaper than AJ Bell.

      Between £32K – £250K AJ Bell would be cheaper.

      Due to the commission charged by AJ Bell Vanguard would be cheaper once the portfolio value is at/higher than £250K.

      Vanguard will not charge you for transfers from Vanguard to AJ Bell.

      AJ Bell will charge £25 per holding to transfer from AJ Bell to Vanguard.

      For any other charges please check the websites of both providers.

      Regards, Pinch

      1. Hi Ken,
        Sorry, I’ve just spotted an error in my last post.

        This sentence “Due to the commission charged by AJ Bell Vanguard would be cheaper once the portfolio value is at/higher than £250K.” is incorrect.

        Once the portfolio size goes above £32K AJ Bell is cheaper than Vanguard due to the cap of the account fee at £30 whereas Vanguard account fee is only capped at £375.

        Therefore even taking into account that you’re paying commission (as per above example £18 per year) when buying in AJ Bell it still stays cheaper.

        However, all of this can change and then you would have to look and compare again. Also, there are other providers with different charging structures – iWeb, mentioned by Alan, being one of them.

        And last but not least there is also the point of broker diversification.

        How comfortable would you be having all of your investments (and therefore dividends) with one broker only and this broker going into administration? You’d be losing access to 100% of your dividends straight away for a period of time. If you rely on your dividends to pay for part or all of your living costs what do you do then?

        Would it therefore be better to spread it out a bit – even if you were to buy the same ETF with a number of brokers? And even if that meant that overall you’d be paying some extra money in fees?

        As for the number of brokers? Not sure, tbh.

        In the case of 1 of your brokers going into administration you’d be looking at temporarily not having access to your dividends to the tune of:
        – 2 brokers – 50% dividends not accessible
        – 3 brokers – 33% dividends not accessible
        – 4 brokers – 25% dividends not accessible
        – 5 brokers – 20% dividends not accessible

        Something to think about, methinks.

        Regards, Pinch

      2. Hi Pinch
        Thanks for that very detailed reply and for taking the time to do it. Much appreciated. It’s cleared everything up. I’ll have a look at AJ Bell.

  14. Hi TEA! Thanks for this post it’s very useful! At the moment I only invest in my pension and I don’t know if I should also invest in an ISA. I’m 30 and trying to get to FI by 45/50. Do you have any advice on how to decide how much to put where?
    I don’t comment often but enjoy all your posts! Thanks for making me laugh and also teaching me how things work in the UK!

    1. ladyaurora · · Reply

      Hi claire TEA wont/ cant give advice. Ill tell you what i do. i have saved in both. If you want FI before 55 yrs you need to save a in your isa too ,as you can access this when you want but you cannot get money from your pension until your at least 55.

    2. You could use a spreadsheet to experiment with how varying the amount you put into the ISA vs the amount going into the pension (don’t forget to allow for the tax rebate) impacts the amount you’ve got in the pension vs the amount in the ISA that you’ll need to live on until you can get at the pension.

  15. A good sounding out on the pension front. It’s this time of year that people get their pension statements dropping through the post.

    Why give up on free money from your employer regardless of when you can get your hands on it. “Something is better than nothing” and “take it while its there” are my mottos.

    I have done some of these activities: transferred old employer DC schemes to a SIPP, changed from the ‘default’ fund to another one to gain more potential growth/return in an employer pension. Made sure I paid the right amount to trigger the max contribution from the employer.

    The other thing to do is activate the online access to the employer pension account if available and monitor how its value is growing and when they pay in (my employer seems to have ‘mysteriously delayed payments’ at their year end!). But paid up eventually… mmm ? I am getting less trusting of employers by the day.

    My work colleague was wondering what her pension was worth, I told her to login and have a look – “oh” she said, “didnt know you could do that”. “Yes”, I said, “the details were listed in the paperwork you received”. “oh, I didnt bother reading it, just filed it away. I will get my husband on the case as he is looking at all our pensions to see when we can retire.”

    It seems that people just hope it will grow and be worth something when they get to retirement, rather than keep an eye on them. They are not an “apply and forget” scheme.

  16. Little Miss Fire · · Reply

    Really thought provoking article! I had a pension with my last employer and I was really obsessive about how it is frozen since I no longer work there. They couldn’t have given two hoots about making sure I knew who to contact ect… I am always shocked by the amount of older people who have left their pensions unchecked simply because the company they worked for has changed providers and they aren’t sure who their pension is with anymore. The government in the UK have a really good site to help –

  17. I needed a kick up my b..t to sort out my pension so thank you for this post! I am stuck in a 0.5% annual charge ok’ish return big name fund pension where there are not many funds to choose from (most active) and with bad online platform that does not let me easily get all the info. It’s this lack of transparency that I find alarming. I heard about SIPPs from a friend and have just fired an email to HR asking about SIPP contribution/ partial transfer options. I am new to investment so will likely go for Vanguard although slightly concerned that I am not diversified enough – my 2 ISAs are invested into Vanguard Life Strategy.

  18. Hello! Congratulations for your website and performance!! You are an example to follow!

    May I ask one question please? My employer’s pension contributions go into Zurich pension which doesn’t have Vanguard LifeStrategy funds…Do you recommend any alternatives with fair ongoing charge ?

    Thanks a lot!!! 🙂

    1. Hi Chris,
      For a few years my employer used Zurich as well. This is what I had in my pension at the time.

      I did get started with the following fund as this was a somewhat known name for me at the time:

      Invesco Perpetual High Income ZP
      Target allocation in my pension: 100%
      Cost: 1.41%.

      After 3 months I used my 2 holiday weeks to read up on the other funds available and emailed the pension people to get fact sheets. Based on this information I tried to replicate a world tracker and came up with the following 3 funds below.

      I stayed invested in these funds until I left the company I worked for and for some time thereafter. Zurich then started to meddle with the setup of their workplace pension schemes at the end of 2017 and I transferred the pension at this time into my SIPP.

      Please be aware that all market percentages are a few years old and probably outdated. I do not have any recent data about it.

      Regards, Pinch

      Pension Fund: Aquila UK Equity Index ZP
      Benchmark: FTSE All-Share Index
      Target allocation in my pension: 33%
      Cost: 0.56%
      Market: UK
      Holding %: 100%
      £100 splits into: £100

      Pension Fund: Aquila World ex UK Equity Index ZP
      Benchmark: FTSE All world Developed ex-UK Index
      Target allocation in my pension: 33%
      Cost: 0.58%
      Market, Holding %, £100 splits into
      US, 61.00%, £61.00
      Europe, 18.50%, £18.50
      Japan, 10.50%, £10.50
      Asia Pacific, 6.40%, £6.40
      Canada, 3.30%, £3.30
      Israel, 0.30%, £0.30

      Pension Fund: Aquila Emerging Markets Equity Index ZP
      Benchmark: MSCI Global Emerging Markets Index
      Target allocation in my pension: 34%
      Cost: 0.79%
      Market, Holding %, £100 splits into
      China, 24.00%, £24.00
      South Korea, 14.30%, £14.30
      International, 14.00%, £14.00
      Taiwan, 12.50%, £12.50
      India, 8.30%, £8.30
      South Africa, 8.00%, £8.00
      Brazil, 7.20%, £7.20
      Mexico, 4.70%, £4.70
      Russia, 3.70%, £3.70
      Malaysia, 3.30%, £3.30

      1. Oh I see! this is an interesting approach! Thanks a lot for this 🙂 It’s a shame they don’t offer many funds!!!

  19. Hi Chris,
    I think this may depend on what your company is offering and how you define ‘many’.

    The company I was working for at the time had used independent financial advisors to help with the pension scheme.

    The funds on offer were split in 2 main categories:

    Core pension funds: 18
    Additional pension funds: 68
    Overall total: 86 funds to choose from.

    And remember, you could get started with your company pension to get the match and the tax relief back and then (partially) transfer at a later time into a different pension scheme.

    Regards, Pinch

    1. Hi Pinch,

      Yes it makes sense, thanks for this. In fact there are options available but I was just sad that Vanguard funds weren’t included! To be honest I’m not really keen on Vanguard’s UK tilt so I really like this recommendation below since I can put UK equity on 10% 🙂

      Aquila UK Equity Index ZP

      Aquila World ex UK Equity Index ZP

      Aquila Emerging Markets Equity Index ZP

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