Goodbye tension, hello pension!

Eventually, in life, we will all need to have a pension to help us live on, a long-term savings pot with the added benefit of tax relief. Whilst we may still have the state pension to help us out in later life it won't provide enough to live on comfortably so another pension will be a necessity. After finishing my employment in building control back in November my NEST pension received its final payment and at the beginning of this year I transferred what I had invested into my SIPP. Again this is not financial advice, but seeing how wildly the value had gone up and down with the investments made on my behalf by NEST I decided I could do better based on everything I had read and researched.

I have read various books on money in the past year and when it comes to long-term investing index funds (mutual or ETFs in the UK) with low-cost fees are considered the way to go. My portfolio is split into 10% bond based and 90% stocks-based funds and although I could have invested everything into a single Vanguard World fund I have split them between UK, US and Euro funds. So now let's dive in!

Fund 1: Artemis High Income - Class 1 Monthly Income

This fund makes up 10% of my portfolio and the majority of it is made up of bonds with a small number of company shares. In order to provide high income the bonds it invests in are from companies with low credit ratings making them more likely to default which means they have to pay higher interest rates to make up for this. It aims to balance risk and reward over a 5-year time period. As I get older this is likely to be replaced with a less risky make-up of bonds. It has the highest charge of 0.56% on top of the Hargreaves Lansdown platform charge.

Fund 2: Legal & General European Index - Class C Accumulation

I own two L&G funds with this Euro based fund making up 15% of my portfolio. Out of its top 10 holdings the brands Nestle, LVMH (Moet Hennessy Vuitton) and Siemens AG are probably the best known and the countries of France, Switzerland and Germany provide the largest geographic representation. It has a 0.06% charge on top of the Hargreaves Lansdown platform charge.

Fund 3: Legal & General UK Index - Class C Accumulation

Making up 30% of my portfolio this fund tracks the performance of the entire FTSE All-Share Index and its top three holdings are AstraZeneca, Shell and Unilever. This fund has a very low 0.04% charge on top of the Hargreaves Lansdown platform charge.

Fund 4: UBS S&P 500 Index - Class C Accumulation

My final fund makes up 45% of my portfolio and tracks the S&P 500 in the USA. It has a low charge of 0.09% on top of the Hargreaves Lansdown platform charge and features Apple, Berkshire Hathaway and Tesla among its top 10 holdings.

So that concludes the contents of my SIPP; my plan now is essentially to top it up each month as I will also be contributing to my workplace pension with Scottish Widows. The majority of my savings each month will be going into my stocks and shares ISA and then my Emergency Fund. I will aim to do a full financial review at the end of the year; hopefully, it is not too volatile!