My investments

Here’s a quick summary of my holdings and accounts.

£100k in a high risk (95% equities) globally diverse portfolio. 

This is the bulk of my investment portfolio right now, outside of pensions, and I hope it will contribute significantly to my income over the next 10 years, after which I can access my retirement pots. I invest with Nutmeg. It’s fully managed for a low fee and the online experience is excellent. I also used to work there so I get a lower fee than most.

£15k in peer-to-peer. 

I like to have some money in a few of the many new P2P platforms. They offer interesting rates and creative new lending propositions. And you can pick up some good discounts, loyalty bonuses and referral incentives. But I’m also cautious as they’re a new beast and as such have yet to be tested in a difficult economic environment or forced to react to regulatory changes, big shifts in consumer sentiment or the influx of huge competition. So, I don’t commit too much of my overall equity in this direction. Right now I use Property Partner, The House Crowd and Saving Stream.

£40k cash in current account.

This is a lot to have stored as cash, doing very little for me, but I’m looking at a local buy-to-let opportunity so will keep it here for now while I decide whether or not to invest. The aim is to have a property that we rent out on very good terms to good tenants so we have a regular monthly income to cover the majority of our household bills. If we decide not to invest in a property, I’ll start to drip-feed much of this amount back into my main portfolio in a few months’ time.

£85k DC (defined contribution) pension. 

This is an amalgamation of the various employer schemes I’ve been in over the past 15 years. When I look at those figures – £85k and 15 years – it astonishes me. I really should have way more than that after saving into pensions for so long. This is because I always by default selected the minimum % of my salary to put in. I should have committed more – to get the highest matching employer contributions, at the very least. It’s currently managed in the one personal pension portfolio, again set to high risk (95% equities).

£6k per annum final salary (defined benefit) pension / £230k. 

I’m currently going through the very painful process of trying to cash out a final salary pension, the core of my retirement plan, and move it into a new personal pension portfolio. I got a transfer value quotation which I feel is very good. It’s high because so many of these schemes are struggling to keep up with the payout schedule and would rather get you off their books. Plus, long-term gilts, which are relied upon for these schemes, are priced high, even giving negative yields in some instances. This makes it really expensive for the pension fund administrators to cover the guaranteed annual income so the effective transfer-out value shoots up. I also want to be able to access the pot in irregular chunks and at the age of 55 not 60 so I have freedom to do more interesting things with it, like buy a business, help family or friends with a venture or onto the property ladder, and so on. The problem is, you have some big laborious legal processes to wheel through before a DB scheme can do the transfer. It’s designed to protect you from making rash decisions, apparently. I’m finding it obstructive, unhelpful and very, very expensive.

£150k house value. 

At the start of 2017 we down-sized from our 4-bed on the outskirts of London for a 2-bed in west Yorkshire. This meant we could own our home outright without mortgage. I know many don’t think this is a necessary component to becoming FI, and I can see why, but personally it just gives me a feeling of comfort and security to know the house I live in is completely my own. The house is very quirky so it’s hard to pinpoint a true value but I think we got a good deal. With some improvements, for which we’ve budgeted £10k, I’d estimate we could sell for £175k currently – not that we have any intention of doing so for several years at least.