Would welcome feedback regarding nearing-retirement portfolio

[happyemailer]

OK, I've just turned 56 and realised that if I want to retire like my father (at 60), I need to start making more detailed in plans !

(The difference being that my father worked for the UK government for the last 30 years of life had a pension plan effectively defined for him, and whilst he died at 81 [generally fit, but his moderate smoking probably caused a brain aneurysm], I'm assuming that ons.gov.uk estimate of my life expectancy, 85 with a 10% chance of reaching 98, is something I should plan around.

I started saving into pension schemes at 24, and over the years built up a range of older L&G "With Profits" (£33K), and Aegon "final bonus" (£76k) a Hargreaves SIPP (£224k created by moving out of another scheme) plus my current company personal pension with Aviva(now at £780k). So yes, the last year has pushed the total above the "life time allowance".

I also have a range of ISA's etc. in cash and shares for my wife and I too.

My immediate thoughts are to leave the L&G and Aegon ones alone, but move the Hargreaves SIPP to Fidelity, topped up with a £300k transfer from Aviva - this would reduce the Fidelity fees (which reduce to 0.2% over £500k) and if some time in the future there was a problem getting money out of Aviva/Fidelity - I would have recourse to the other.

Obviously the big question is - how much can we live on ?

My wife is a carer, and doesn't work (although prior to PiP changes she had built up her NI years), but I have been paying as much as I could into a personal pension for her (with Scottish Widows, now at £62K) - but with two daughters at school/uni the answer is probably we're spending at quite a high rate (we're in the process of creating a budget to build up a better idea). Maybe 65 might be a more realistic age

Anyway..... Moving to Fidelity gives me a chance to start a portfolio from scratch, and here's my current draft. I would welcome feedback !

[Alaric]

Moving to Fidelity gives me a chance to start a portfolio from scratch, and here's my current draft.

You are likely to be running your SIPP from when you retire on the basis of withdrawing interest and dividends. Depending on how much weight you put into each fund or ETF, there's quite a bit of lower yielding stuff in there. Will the income be enough and would you be able to tolerate greater risk either to income or capital value in search of a higher one?

Any particular reason for choosing Fidelity? Does their platform allow individual shares to be purchased? If so then Investment Trusts come into consideration as well. These have the possible advantage that they run their affairs so as to be able to maintain their dividends, so income from them, if not guaranteed, is reliable.

[happyemailer]

Hi Alaric,

I chose Fidelity to help reduce fees, decent online platform and wider choice then Aviva. (As well as less choice,, Aviva also charge 0.23% fees when moving money into a different fund)

Also, I have opted for some "ethical funds", that seem to have lower levels of return (at the moment).

My thinking was when retiring to start drawing money from my ISAs, then Aviva, and use Fidelity for more risky/longer term investment. Fidelity does allow for individual shares to be purchased.

[Alaric]

I chose Fidelity to help reduce fees, decent online platform and wider choice then Aviva.

There are also platforms that charge a £ amount for dealing and custody, but nothing as a percent of value even for OEICs.

[mickeypops]

Hi, just a quick reminder that HL’s SIPP fees are capped at £200 if it contains just ITs, shares and ETFs. Something to consider as they are very cost effective when in drawdown.

[gbjbaanb]

Obviously the big question is - how much can we live on ?

Don't ask us, find out - open an account with one of those onlinbe doodahs and enter all your year's expenditure to get a breakdown. That's how much you need. You'll need about the same in the future, subject to inflation.

Anyway..... Moving to Fidelity gives me a chance to start a portfolio from scratch, and here's my current draft. I would welcome feedback !

Ignoring the "which broker is best" that should be taken to the brokers board, I'd say you have a fair chunk of bonds, and gilts there - your Royal London has underperformed the index for a long time, and as you have the index too in the ETF, you might as well stop paying RL to not only be useless but also pay little yield, and bung it all in the ETF instead.

You don't seem to have much exposure to Asia, your global trusts are mainly USA (MidWynd is 50% usa, Bankers 30%)
I'd also have a bash at some healthcare-focused trusts (International Biotech is my favourite, apparently more defensive despite its name, but others like WWH) and property (regional reit for example).

[happyemailer]

Thanks gbjbaanb - appreciate the advice.

Re "How much can we live on ?" The approach I'm taking is to keep better track of all outgoings (using the Moneydance app) using categories that the OSN.go.uk use so that I can benchmark against per-person averages of other UK families !

(Google ONS Detailed household expenditure by disposable income decile group: Table 3.1)

Yes, you're right about Asia and I will look at Health. I've also been reading the HYP forum, and now plan to include shares in the mix.

[gbjbaanb]

Who cares what the Jones's live on. Don't bother - live for yourself and tell the rest of the world to shove it. That's part of the point of FIRE!

[happyemailer]

Hi gbjbaanb,

> Who cares what the Jones's live on. Don't bother - live for yourself and tell the rest of the world to shove it. That's part of the point of FIRE!

Indeed, but benchmarks suggest areas in which savings could/should be made.

As an example, our food and clothing expenditure are considerably above the average for our demographic, so we're looking at this area to reduce ongoing costs.

However, with mobile phone we're below the average - so less priority to scrutinise.

atb

Paul