Pension and ISA news

Just a note to myself really so I can keep track of what’s going on with my pension and ISA.

I finally went with Scottish Equitable in the end. I’d previously mentioned about an IFA who was going to charge a lump sum of about £7.5K to move my pension, but I found another IFA who get their charges out of the annual fee I pay to Scottish Equitable, so I went with them in the end. I had a letter from Barclays Life yesterday confirming my pension transfer to Scottish Equitable. Along with the letter was a transfer valuation and I was a bit disappointed with the performance this last year. I know stock markets have taken a tumble so I should be thankful that my pension has still risen in value, but it’s risen by less than the amount I’ve paid in this year, so I would have been better off putting the money elsewhere (even under my mattress!).

I think part of the problem is that it’s invested 100% in the UK so it’s value is very much tied to the performance of the UK stock market, which has been pretty turbulent over the past year. Barclays Life don’t offer very many funds to invest in and they have no online fund switching or valuation capability, so I’m quite looking forward to managing my pension with Scottish Equitable. The initial fund allocation will be broken down as follows:


% allocation

UK Fixed Interest


With Profits Growth


Insight Div. Target


Invesco Perpetual Income




Lazard European Smaller Cos.




JPM Natural Resources


UBS Global Emerging Markets


Merrill Lynch Olympian Growth


These funds were selected by my IFA to give me a mixture of stable growth and exposure to global markets, but the SE web site will enable me to keep a close eye on each fund’s performance and switch to another fund if they are not doing so well. I really like the idea of spreading the risk around so that if one fund doesn’t fare too well, the other funds should be unaffected (fingers crossed!). I also believe that the UK economy has pretty much run out of steam now so it’s time to invest elsewhere if I want to see decent growth, although I still want to keep some in the UK for stability (this is my retirement we’re talking about here so I don’t want to blow it all on completely speculative investments!).

A friend of mine suggested using a SIPP instead of a personal pension provider, but it seems the charges on a SIPP can actually be higher than SE. For instance, I use Hargeaves Lansdown to manage my ISA as they provide discounts on initial and annual charges, but the catch is that they don’t discount the annual charges when the funds are held in a SIPP. So you will normally pay between 1.5 and 1.75% per year in charges which doesn’t make it any cheaper than a normal personal pension. I like the idea of having an IFA I can talk to too, which of course you don’t get with a SIPP.

Talking of Hargreaves Lansdown, I use them to manage my ISA, which has been doing pretty well so far. As I’m not reliant on it to provide a pension and mainly want to use it to pay off my mortgage, I’m more than happy to invest in much more risky and volatile markets. As such I’ve invested in Asia Pacific, Brazil, Russia, India, China (BRIC) and a global fund which is 50% invested in the UK. So a nice spread. I also had quite a lot in the Invesco Perpetual European Growth fund which was really popular 5 years ago, but has been pretty flat recently, so I decided to sell it all and switch into three new funds. The question was what to invest in…?

My thoughts came back to that Mark Twain quote:

"Buy land, they’re not making it anymore"

Well the same could be said of gas, oil, copper, tin, zinc, gold etc. Basically all the natural resources that are being consumed by our hungry global population. Just look at the price of oil! So I believe that companies that are involved in the extraction of natural resources will benefit hugely from higher prices, resulting in increased profits, which can only be good for their share prices.

So this week I have switched into 3 funds that have exposure to natural resources:

JP Morgan Natural Resources (the same fund that 5% of my pension is going into)
Jupiter European Emerging Opportunities (exposure to Russia and Eastern Europe)
Junior Oils Trust (Oil & Gas exploration, production, transportation companies)

It’ll be interesting to see how I do as in just 1 week I am already seeing a 5.6% gain on my investment in the JP Morgan fund.

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