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Private Pension through Employer

Including Financial Independence and Retiring Early (FIRE)
AsleepInYorkshire
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Private Pension through Employer

#285051

Postby AsleepInYorkshire » February 17th, 2020, 9:43 pm

Before Xmas I took up a new position.

I should be joining the companies pension scheme at the end of this month. The scheme
  1. Is with Scottish Widows
  2. Matches my commitment to a maximum of 5% of my gross salary
  3. Allows me to commit my funds through salary sacrifice
  4. Currently adds the saving my employer makes on ENIC to my pension
I have managed to calculate that for every £1 I devote to the scheme an additional £1.20 is added.

I'd prefer not to mention the exact amount that is going into the pension, merely to mention I am maximising the above opportunity. Has anyone any experience of Scottish Widows through a fund they have been in? Or alternatively does anyone have any thoughts regarding the sort of fund that I should review for investment please?

I should note for clarity that payments into the fund will be monthly and will have the benefit of "pound cost averaging". Payments into the fund will be not less than 10 years but no longer than 15.

AiYn'U

JohnB
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Re: Private Pension through Employer

#285053

Postby JohnB » February 17th, 2020, 9:53 pm

My last job had a SW pension with aggressive contributions and full salary sacrifice. I had no problem with them other than their index tracker charges were much higher than you can get with an ETF in a SIPP. I think they do partial transfers so you could move out a lump sum each year, but for simplicity I waited until I left before doing it, and there were no problems with the transfer.

dspp
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Re: Private Pension through Employer

#285055

Postby dspp » February 17th, 2020, 10:28 pm

If you are putting a substantial amount in, then it is perhaps worth moving an annual amount out into a SIPP once per year. That way you won't get clobbered with any need to get an IFA review in future years just to allow you to move it. regards, dspp

xxd09
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Re: Private Pension through Employer

#285067

Postby xxd09 » February 17th, 2020, 11:56 pm

Scottish Widows will be expensive-that seriously counts with a long term investment like a pension
People here have given you some answers-I would do some work to escape their clutches!
xxd09

spiderbill
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Re: Private Pension through Employer

#285193

Postby spiderbill » February 18th, 2020, 2:01 pm

Have to say I've been pretty happy with them. Have a personal pension that was originally a company one that was migrated after some rule changes in the 90s. Despite reducing my contributions after a redundancy in 2002 I've been pleasantly surprised at the growth, and they've become much more flexible about what you can do with it in the last few years. In fact I was speaking to them yesterday about taking the TFLS and they were very efficient.

Hopeless online facilty is the only downside I would mention, (they've been promising an upgrade for years), though naturally I'm not sure if the deal that I received is still available now, so worth checking the figures carefully if you can get any forecasts out of them.

cheers
Spiderbill

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Re: Private Pension through Employer

#285506

Postby GoldRush » February 19th, 2020, 7:57 pm

Had a look at a Scottish Widows pension recently that was being offered via an umbrella company. The annual management charge can be around 1%, and if you look at what most of their investment options are investing in they are index tracking funds that you could purchase in your own SIPP for around 0.07 to 0.20%.

Being able to pay straight from your employer and therefore save the NI is a great bonus though, but over the years that saving could be eaten up by the high management charge. You could be talking thousands a year in charges on a large pension fund.

Scottish Widows do have free transfer out, but wasn't aware that you could do partial transfers out of a Scottish Widows pension, but if that is an option then if you're saving large amounts into it, it's probably worth looking at transferring out into your own SIPP every so often.

I quite liked the look of the fund mix they had in their aggressive option, a nice mix of UK, Emerging, Pacific, Euro, US and Japan funds, so I'd be quite happy with it at least on a short term basis to build some money up via salary sacrifice. They do offer different options you can invest in, some with more bonds so in theory less risky, so worth looking at what they offer other than the default option and pick something that suits you.

Also worth saying they are part of Lloyds Banking Group, so hopefully a safe option to invest with.

xxd09
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Re: Private Pension through Employer

#285510

Postby xxd09 » February 19th, 2020, 8:38 pm

Probably there are other hidden charges-up to 2%
If you realise that with a conservative portfolio growing at a respectable 6% pa compounding that these sort of charges will be removing a third of your growth pa.
Then do the math of this effect on a 30 year investment -the damage to your final results will be serious
A great investment for them with you doing all the heavy lifting!
xxd09


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