Should I transfer my pension to a robo adviser?
David | London| 08/02/2019 | 2
- Private Pension
- Robo Adviser
- Pension
David's question in full
Hi. Trying to get a bit more pro-active with my pension. I have just over 100k in an Aviva pension mixed investment 40-85% fund with a 0.6% charge. If the money had been in an online managed fund like Nutmeg for example, is it reasonable to assume that as the markets fell last year the funds would have been managed in real(ish) time to limit the damage and therefore not suffer the loss the Aviva fund did? If so, is it therefore a no-brainer to transfer my pension to an online managed pension like Nutmeg (0.35% charge over 100k) or is it not quite as simple as that?! Thanks for your time
Lesley James's Response
Hi David,
Fabulous that you are being pro-active about your pension fund.
Taking a look at fees and performance is exactly the place to start.
I can’t comment here about the relative merits of Nutmeg and Aviva, because we don’t know each other well enough and I don’t have the full context - for that kind of advice you need to seek out a regulated financial adviser (try looking on VouchedFor).
However, hopefully I can give you some pointers.
Firstly, (I’m afraid) all ‘managed’ funds work in the same way.
Aviva, Nutmeg and many other providers will all be looking at the potential for different markets and allocating your money in a way that they believe will bring you the best future return. With varying levels of success, it has to be noted.
And different managed funds offer different risk levels – for example, Nutmeg have 10 – with higher numbers relating to greater equity exposure and the lower numbers holding higher proportions in less volatile stocks.
Sadly, 2018 wasn’t a great year for stock markets, so all but the very lowest risk managed funds will have struggled. Including your Aviva fund. And, I note, all of the Nutmeg managed funds.
But dips come with the territory I’m afraid.
As long as you don’t panic, you stay invested, and have time to wait for markets to settle down, things should eventually turn around.
For those with additional spare cash, dips can even be a chance to invest more.
If you are feeling nervous, however, you might want to look at lowering the amount of risk you are taking so that, next time, you are not hit quite so hard.
Apart from risk, the only other things you have control of are the amount you invest and the charges you pay. And thankfully (combined with the right risk) these are also the two biggest indicators of long term success.
As you are already building funds in your pension, the next question is to take a look at how you can minimise your fees but still invest appropriately.
Index-tracking, managed funds, also referred to as ‘passive multi asset’, are a great place to start because of their combination of good diversity and generally, very low fees. This is what many of the robo advisers offer. And, nowadays, so do many of the more traditional providers.
If you are willing to do your own research, Boring Money have some Best Buy tables on here that would be a decent place to start. Or an adviser could do the research for you, and you could get a good deal without having to do the work.
A final word on fees, though.
Nutmeg actually charge 0.75% on the first £100K, then 0.35% on the balance above that.
There is then an additional charge of 0.27% for the investment fund and the effect of spread on the underlying investments.
So the effect of charges on £120,000 is actually 0.95% (£950) pa.
However, this does not necessarily mean they are more expensive than Aviva’s declared 0.6% pa.
Nutmeg should be congratulated for being so open about all the fees you will face. What you need to make sure is that you know all the charges you will face, regardless of provider.
A good start would be to ask potential providers for their total ‘Ongoing Charges Figure’.
This is still not an ideal measurement, but is a much better option for comparison than a single ‘Annual Management Charge’ or ‘Product charge’, if you want to see what the true annual costs of investment will be.
Our Expert
Lesley James
In my 25 years of experience in the industry, I’ve had the privilege of working with a very wide range of successful and experienced people in a whole variety of different situations. With that wealth of experience behind me, I am now the proud co-owner of Simplified Money.
Related Questions
-
I am self employed (40) with no private pension, earning £50,000 a year. I have savings and can make a lump sum investment. I know nothing about Stocks or Shares. What is the best way forward for pension and tax reduction? Desperate Anna
Anna | London | 25/03/2019 | 0
- Private Pension
- Stocks and Shares ISA
-
My pension SIPP has an annual charge of about 2%. Now that I am in monthly drawdown, I'm interested in exploring alternative providers to lessen the charges, since future returns look like being lower than they have been in the past.
Michael | London | 25/03/2019 | 0
- Private Pension
-
When I retired in December 2018, I considered consolidating my pensions for income drawdown, but it meant handing over management of the investments. After viewing the performance of the funds the Standard Life Active Retirement pension invests in, I hesitated. Recently I spoke to an advisers aligned to the investment philosophy of Albion Strategic Consulting headed by Tim Hale, but was scared off again by the messages regarding DIY investor dealing with re-balancing, sequencing, and lack of ability to stress test without the correct professional financial software, in addition to the high costs. I understand the basics, but am now totally unsettled as to the direction I should take and if, at such a critical stage, I should invest in an IFA on a regular basis. I appreciate you cannot give me direct financial advise but I am finding the whole event very disconcerting, when I thought I had the basic acumen to manage the transition.
Rob | Hertfordshire | 20/03/2019 | 1
- Private Pension
- Pension
-
For the last 9 months I've drip fed just over £10,000 into a Moneyfarm Investment ISA... it has been a very volatile year as you know. Moneyfarm seem to have done a good job of protecting my capital... however I haven't really made much in the way of gains... If I wanted, would I be able to transfer the whole lot to another platform where the fees are lower? I know you're not allowed to give regulated advice - but I'm uncertain if I should transfer the whole lot in one go, or drip feed.
Robert | UK | 14/03/2019 | 1
- Stocks and Shares ISA
- Robo Adviser
-
I am in my mid 20s & earning a regular salary. I have decent savings and am toying with the idea of Wahed Invest (I am looking for shariah compliant funds). I am also dabbling with the idea of property. If I have no financial commitments (living at home for next 2 yrs), is it worth using 90% of my savings for a house deposit for buy-to-let purposes? I am thinking this would reduce my loan to value?
Zara | West Midlands | 12/03/2019 | 0
- Lifetime ISA
- Cash
- Robo Adviser
-
I have about £100 monthly extra I want to invest, but I am not sure if my ISAs represent good value. I thought I could put the money in a higher risk investment, as it is money I can invest over 5-10 years, and had thought Nutmeg might be a good option as I have little investment experience. Am I right in thinking I can only contribute to one Stocks & Shares ISA at a time in my name? I could just put more money into my existing ISAs. What do you think?
Colin | Lothian | 11/03/2019 | 0
- Stocks and Shares ISA
- Robo Adviser
- Online Investment Platforms
-
My 60 year old mum is not very financially literate and has has no private pension. She has approximately £900k to invest, from which she will need to draw down c.£40k a year for life. She is not very financially literate and would not be able to proactively manage the money herself. Would you favour an Independent Financial Adviser or a Robo Adviser for someone in her position? Thank you!
Harry | Kent | 11/03/2019 | 1
- Private Pension
- Robo Adviser
- Online Investment Platforms
-
I am 47 and I would now like to open an investment ISA for growth for at least 10 years. I am tempted by the Vanguard LifeStrategy 80 due to the low fees and strong reputation. I would also consider investing in a couple of other Vanguard funds as well. Would this be advisable or relatively unnecessary, if I'm already investing in the LifeStrategy fund? I have also been looking with interest at Nutmeg, Wealthify, IG and AJ Bell Youinvest. Is there any provider that would stand above the others as most suitable in my circumstances?
Matt | South Yorkshire | 11/03/2019 | 0
- Stocks and Shares ISA
- Robo Adviser
- Online Investment Platforms
-
My son has a work-based pension which he contributes 3% to, matched by 3% from his employer. He has nearly 10k with Nutmeg, 4K + in a Lifetime ISA, the rest in an ISA. If he increases his pension contribution, I have read it may affect the amount he can borrow on a mortgage. Is this correct? Should he take a SIPP out as well? Is there any advantage in maxing out his managed Nutmeg Lifetime ISA in the next financial year?
Richard | Hertfordshire | 06/03/2019 | 3
- Private Pension
- Stocks and Shares ISA
- Lifetime ISA
- Pension
-
I am 65 and still working. I have a workplace pension, which was closed and replaced with a retirement saver pension. I contribute to this via salary sacrifice. I also have a personal pension serviced by an IFA. Should I move my personal pension fund to a SIPP provider at this late stage of my life? I would like to consolidate the workplace retirement saver and personal pension fund together and manage it myself.
Den | South Yorkshire | 27/02/2019 | 0
- Private Pension
- Pension
- Workplace Pension
-
I recently came across your blog and it has been a great introduction to learning about my personal finances. I was wondering if you could recommend any additional resources (websites, books, online help) for beginners and that are tailored to the UK market. I am in my early 20's and I'm looking to further my knowledge of money, and foster a greater relationship with it. In addition to that, I'd like to know your opinions on how the possible outcomes of Brexit will affect the market and potential personal finance investments.
Rita | London | 23/01/2019 | 0
- Stocks and Shares ISA
- Robo Adviser
- Online Investment Platforms
-
With a SIPP in drawdown would a company like Netwealth whose investment management fees are of the order of .66% of the value of the portfolio, be a better option compared to companies like Hargreaves Lansdown or Investec? What are the relative benefits of Netwealth over the more traditional wealth managers?
Steve | Lancashire | 22/01/2019 | 6
- Private Pension
- Robo Adviser
- Online Investment Platforms
-
Is there a Robo Investor who provides both income and growth for those who are retired? (There must be a large market for this?) It seems to me that at the moment all the Robos focus on long term growth and reinvesting dividends - which is fine if you are younger.
David | 18/01/2019 | 1
- Robo Adviser
-
Hello, I really enjoy your website and find it useful and concise. My question is, what is meant by long term savings? I am 54, so what should I consider to be an appropriate time frame for any investment I make, that could supply the best results?
Jennifer | Essex | 16/01/2019 | 9
- Online Investment Platforms
- Funds
- Pension
-
I’m new to investing and in my late 30's. I'm actually stuck in a dilemma whether to invest using DIY platforms like Interactive Investor, A J Bell or Hargreaves Lansdown OR invest using robo advisors like Nutmeg, Moneyfarm or Pensionbee. I have compared the fees and they are not significantly different. Do robo advisers have a better return rate? I can dedicate some time to DIY investing but not a significant amount of time. Please advise. Thank you.
Victor | Kent | 14/01/2019 | 1
- Robo Adviser
- Online Investment Platforms
-
I have an old pension and they have written to me saying that they are going to enhance my pension if I transfer it out. The company is also offering free independent advice. I have £117,000 in the pension at the moment, which would give me £6400 a year at 65. I am 61 in April and would like to finish work at that point. I am not sure how much extra they will give me. Have you any ideas or suggestions to help me decide? Thanks.
Nicholas | Carmarthenshire | 04/01/2019 | 0
- Pension
- Workplace Pension
-
From my retirement I received a lump sum of money and a monthly pension. I have £100,000 that I do not need for the foreseeable future... One of my main concerns with Financial Advisers are their costs... All I want is simply to see this money grow to its potential, sensibly and above inflation... Therefore my next thoughts are Stocks and Shares ISAs... My only concerns here are the current Brexit problems - I saw the FTSE drop this past week. I cannot find any information out there to assist with my decision making if this is certainly a good time to invest... I am aware that I can place £20,000 for this year. Come April 2019 I place another £20,000 and so on until the £100,000 has been utilised. Do I have to place it into the same fund or can I choose another different fund with a different company?... Please can you help to ease some of this burden, which has proved an awful part of my retirement and made me frightened to spend any money.
Katherine | Derbyshire | 02/01/2019 | 0
- Private Pension
- Stocks and Shares ISA
- Cash
- Robo Adviser
- Online Investment Platforms
- Workplace Pension
-
I’ve been investing in Nutmeg’s Risk 10 profile for three years which helped my deposit for my house. I am now wondering whether to use Nutmeg again, or should I use LifeStrategy for my £1000 per month? Is there a difference between Vanguard's LifeStrategy option and let’s say a well known robo adviser like Nutmeg? I am still a beginner and would like to keep things simple, but happy to take risk and prepared to leave my investments for a long time.
Jordan | Surrey | 26/11/2018 | 6
- Robo Adviser
- Online Investment Platforms
- Funds
-
Do you have any recommendations for books that I can buy my 18 year old daughter for Xmas on the subject of pensions and investments so she can start to understand the subjects? She's young I know but I would like to get her started. Many thanks!
Nicki | Devon | 15/11/2018 | 2
- Robo Adviser
- Online Investment Platforms
- Other
-
I was lucky enough to inherit a significant sum from my father... currently in Alliance trust platform in 10 investment trusts. They have delivered well in the last 20 years. But they are UK equity based. And highly risky. Do you offer a sanity check service for confused individuals like myself? I don’t know what to do...
Paul | Berkshire | 12/11/2018 | 2
- Private Pension
- Online Investment Platforms
- Funds
-
I am a 30 year old British expat living and working in the Netherlands. I worked in the UK for 5 years but to my knowledge I did not have a work pension of any sort. I've been working in the Netherlands for the last 4 years, and again have no pension (my company does not provide anything). I'm getting increasingly worried about my future retirement and my lack of any kind of pension. Firstly, I am not sure what - if any - state pension I could receive (either from UK or Netherlands) but I assume not much. Secondly, I'm ready to start investing on a monthly basis into a private pension fund, but I have no idea what the best option for me would be. Really lost and confused, and would really appreciate any advice you might have.
Lucinda | Kent | 09/10/2018 | 0
- Private Pension
- State Pension
- Workplace Pension
-
My wife, 56, is still working but has a final salary scheme which she is drawing as well - currently £26k per annum. Her current employer's pension scheme is defined contribution, and her fund stands at £1.050m. Therefore, her total pension is around £1.57m. We protected her Lifetime Allowance at £1.25m, but all growth will now be taxed at the excess rate. My idea is to take the 25% tax free amount out of the defined contribution pot, and reinvest it in the same funds as the pension. This will then remove growth on the 25% from the excess tax rate to a capital gain when sold, thereby saving a considerable amount of tax. Am I right?
Rod | Hampshire | 05/09/2018 | 1
- Private Pension
- Workplace Pension
-
My wife and I have recently separated. The equity in the house is going to be split 50/50. We don't have any other meaningful assets. We have agreed to co-parent the children equally. My wife is requesting that I pay child maintenance, child care and school expenses. A CMS document states that shared child care results in no child maintenance payments. However, I do agree with the child care and school expenses payments. Our daughter has Autism Spectrum Disorder, so my wife gets a Disability Living Allowance for her and also works full time. If I don't pay the child maintenance, child care and school expenses, my wife is threatening to claim spousal maintenance, and take half my pension. Should I pay the £350/month or take my chances in court?
D | Lincolnshire | 03/09/2018 | 0
- Pension
- Other
-
Can you advise me on the best approach when looking to invest in a product that offers compound interest? I’m thinking about funds rather than bank accounts. I also have 4 different pensions on the go. Should I keep them separate to diversify the risk? Or consolidate them? How will these pensions be treated when I retire? Will they be considered in aggregate by the tax man?
Craig | Clackmannanshire | 16/08/2018 | 1
- Private Pension
- Online Investment Platforms
- Funds
-
I have about two thirds of my ISA in funds with Charles Stanley Direct and about one third left with St James's Place. I was planning to transfer the remaining one third to Charles Stanley Direct. However the recent platform price increases seem to put me in the worst position possible. I also have a private St James's Place pension. Would I be correct in thinking the fees are also high on this, and I could do better elsewhere? Can I transfer into an SIPP for example?
Gerry | Bedfordshire | 15/08/2018 | 5
- Private Pension
- Online Investment Platforms
- Funds
-
I'm 24 and would like to begin investing. Am I better off using a robo advisor such as Wealthify/Wealthsimple or a fund such as Vanguard LifeStrategy?
Amanda | Greater London | 06/08/2018 | 6
- Shares
- Robo Adviser
- Online Investment Platforms
-
I am 73 and cautious. There are two areas that your advice would be helpful..what if you just spend thousands on buying the gold standard footsie companies like shell and the rest and keep them for five years and then cash them in ?
DB | UK | 24/07/2018 | 6
- Robo Adviser
- Online Investment Platforms
- Funds
- Pension
-
I'm nearly 30 and looking to open a private ready made pension, and also an investment ISA for retirement funds or towards a property, but very unsure what risk level to choose (low to medium, or medium to high)? Any comments or advice welcome.
Susan | WMD | 24/07/2018 | 1
- Private Pension
- Stocks and Shares ISA
-
My wife needs to set up a SIPP with a good value, low cost, low maintenance underlying investment portfolio. We want a good mobile app from a well respected provider. Where can we see the options and directly compare historic returns so we can make a decision?
Guy | HRT | 17/07/2018 | 1
- Private Pension
- Pension
-
Nutmeg require a minimum investment of £5,000. As I have less than £5,000 per annum income I am a bit confused about how much I can put into a pension. I know the government will only gross up a maximum of £2,880 per year but can I put more than this in and forgo the gross up?
Barbara | HRT | 10/07/2018 | 1
- Robo Adviser
-
I hope you can help. I recently consolidated two modest pensions into a SIPP in readiness to start UPFLS drawdown in May (2018). Whilst I was hoping for growth in my investments I wasn’t expecting it to rocket and now find I could well be looking at exceeding the lifetime allowance, possibly even before my first annual drawdown in May, and I’m unsure what, if anything, I should do.
John | LDN | 03/07/2018 | 1
- Private Pension
- Funds
-
Hello Are there any specific pensions you would recommend, with low charges, which I can set up for my 11 yr old son. I am already paying the maximum into a junior isa. AH
Anita | SXW | 18/06/2018 | 3
- Private Pension
- Junior ISA
-
I was considering applying for Individual protection 2016, which I understand would give me an LTA of £1,021,390. However, following the Inflation rise of LTA, it seems the LTA is now at £1,030,000. It now seems pointless applying for Individual protection 2016. Have I got this right?
David | LDN | 12/06/2018 | 0
- Pension
-
Hi, If I take a lump sum from my pension at age 55, what is the rate of tax after the first 25%?
Judy | 17/05/2018 | 1
- Pension
-
We have a portfolio of ISAs/ PEPs worth around £250k, currently invested via Cofunds, managed by Chelsea and Bestinvest. I'm told this is quite an expensive option regarding platform charges. Are there better options?
John | BRK | 08/05/2018 | 6
- Robo Adviser
- Online Investment Platforms
-
How long does it take to release money from your pension at 55 years old?
Diane | WYK | 01/05/2018 | 1
- Pension
-
Do you have information on taking your pension pot before retirement? My husband is 62, on a final salary scheme & is trying to get clear information on it.
Jo | 17/04/2018 | 3
- Pension
- Workplace Pension
-
Hi, I've got an old D.B. pension, approximate value £12k. I would like to invest & top up each month. Who would you recommend? Also I would like to make an investment, & don't know where to start? Thanks
Eve | 04/04/2018 | 5
- Funds
- Pension
-
My question is about my wife's pension valuation in a divorce situation. She is on a final salary scheme working for a national charity organisation. I feel the CETV value is too low and certainly does not take into account the inbuilt benefits such as guranteed final salary, life insurance.
Jay | 12/02/2018 | 0
- Pension
-
I am a 59 yr old retired lady with no income but I have reasonable equity..is it worth starting a pension or is it too late?
| 06/02/2018 | 2
- Private Pension
- Pension
-
Hi, If I take a lump sum from my pension at age 55, what is the rate of tax after the first 25% ??
Gareth | HAM | 26/01/2018 | 0
- Pension
-
I am in the very lucky position of just having received a gift of £800k which I want to invest for our retirement. My husband and I are in our late 40s and aim to retire in around five years. We have 11 more years of school fees to fund, then hopefully university fees for two after that. I've put together a plan for us - can you have a look and see if it makes sense?
Fiona | UK | 18/01/2018 | 6
- Private Pension
- Stocks and Shares ISA
- Junior ISA
- Shares
- Cash
- Online Investment Platforms
-
Can losses in a pension SIPP be offset against anything?
Henryk | HAM | 17/01/2018 | 0
- Private Pension
- Pension
-
I am already receiving a pension from a final salary scheme and I am retired. I have a sum of money I want to invest. Can I start another pension as a saver and, if so, how much can I put in every year?
Collette | Greater London | 25/11/2017 | 0
- Private Pension
- Online Investment Platforms
-
I am a 59 yr old retired lady with no income but I have reasonable equity..is it worth starting a pension or is it too late?
LL | NFK | 10/11/2017 | 2
- Private Pension
- Shares
- Pension
-
If I were retired and drawing my pension, can I earn an income from doing some sports coaching too? If so, how much can I earn without it affecting my pension? Thanks
Charlotte | DEV | 07/11/2017 | 0
- Pension
-
I am getting long in the tooth at 79, a little forgetful and I am going through a painful divorce. This has shattered my confidence and I need help.
Richard | Kent | 05/11/2017 | 3
- Private Pension
- Funds
-
Please help me. Choosing a pension from Aviva. It asks if I want growth or income? Which one do I choose ? I'm 46 .
Ria | Greater London | 11/09/2017 | 8
- Private Pension
- Pension
-
Is it worth using a financial adviser when it comes to switching pensions funds, or should I do the research and pick the funds myself? I am no expert in stocks and shares.
Helen | Dorset | 10/08/2018 | 4
- Private Pension
- Shares
- Funds
-
I am looking for a fund for myself (54 yrs old) but also my son (19 yrs old). Is this fund suitable for either of us with an investment strategy of 10 years +.
| 29/05/2018 | 3
- Robo Adviser
- Funds
-
I use H&L and although they are a bit 'plumy' on the phone I quite like their website and the costs are OK. So I was thinking of H&L for [my son]. I would be telling him to open these two funds and regularly invest and forget about them for 10 years!
R | Greater London | 29/05/2018 | 1
- Lifetime ISA
- Robo Adviser
- Online Investment Platforms
- Funds
-
Why should I bother with paying into a pension at my age of 55 years now when I have never had one?
Tee | Greater London | 07/09/2017 | 4
- Private Pension
- Pension
-
Can I sort a pension out myself online?
Sharon | Greater London | 07/09/2017 | 0
- Pension
- Workplace Pension
-
Which is better - property or pension?
Paul | Greater London | 07/09/2017 | 0
- Private Pension
-
What might a savings pot of £100,000 get me as a retirement income?
Aboodi | Greater London | 06/09/2017 | 1
- Pension
-
Pensions vs ISA - which one is best?
Roderick | Greater London | 06/09/2017 | 0
- Stocks and Shares ISA
- Junior ISA
- Lifetime ISA
- Pension
-
What are the changes with pension annuities? My mother in law has asked as her retirement is looming. I've read in the press it's changing but it all feels confusing. I just need some simple clear advice. Thanks
Keith | Greater London | 06/09/2017 | 2
- Private Pension
- Pension