Sixty year old Jeff Bulled says he is still investing for his retirement, but has switched from pension holdings, to ISAs and property investments.
He explains that this is because he pensions have grown in value significantly, and he is concerned about breaching the lifetime allowance, which was recently reduced to £1 million.
“Like many people my age I’ve had several careers. Now I run my own management training consultancy. But I started off as a director at the British Standards Institute for a number of years. At the time I was lucky enough not only have a decent salary, but access to a final salary pension.”
This he says is the “anchor” of his retirement.
“When I left I had a redundancy payment, and as you can only take £30,000 tax-free I invested the remainder in what was effectively a stand-alone pension, or AVC (Additional Voluntary Contributions) scheme, that ran alongside the company pension scheme. At the time this was offering guaranteed returns of 9% a year,” he explained.
“Of course, 25 years ago interest rates and inflation were a lot higher. This seemed like a decent rate at the time, but not extraordinary. But with hindsight this has proved to be an extraordinarily good pension.”
The money in these pensions is invested in insurance-run schemes. Bulled says: “The company seems to have been sold on at least three times, so it can be a bit frustrating keeping track of things.”
Alongside his pension investments he is also invests in a range of unit trusts and direct shareholdings. “I try to make these as tax-efficient as possible, so I’ve used pensions and ISAs.”
Bulled says he is not an active trader of either shares or funds. “My basic philosophy is to buy and hold. In fact when it comes to funds I don’t think I’ve ever sold them - I’ve just bought and hung on to them.”
Jupiter European has Made me £30,000
Over the years most of these have made him a decent return. One of the best ones has been Jupiter’s European fund. He says: “I’ve originally invested around £6,000 into this fund. It’s now worth close to £37,500. It’s done fantastically well.”
Not surprisingly, this fund has a five-star rating from Morningstar and the manager - Alexander Darwall, has the top Gold rating. He has been at the helm of this fund since 2001.
Muna Abu-Habsa, senior analyst at Morningstar said: “This fund has many of the features we like to see: a talented long-standing manager who is part of a highly experienced European equities team, a diligent investment process that has been proven through time, and a consistency of approach on which investors can rely.”
Bulled also invests in a range of Threadneedle funds, including its American Select fund and European Select fund.
He says: “These have all produced a positive return for me in recent years - in most cases I’ve seen my money at least double.” The American Select fund has a two-star rating from Morningstar, although the European fund is currently unrated.
However, less successful has been a holding in Japan, again with Threadneedle. He says: “I originally invested £2,000 in this fund. It’s now worth around half of that amount, so it’s absolutely bombed. But I don’t see any point in cashing it in, it’s sitting there on the hope of some sort of recovery.”
Top Stocks for ISA Picks
Bulled says he also has a number of direct shareholdings. “I’m not a particularly active trader but will sell as well as buy stocks from time to time, usually just one or twice a year though.”
Bulled says he started he first started investing in shares during the privatisation of the 1980s. “I applied for shares when they privatised British Telecom for example, and British Gas. I still hold shares in BT (BT.) today as well as National Grid (NG) and Centrica (CNA).”
Those who held onto their original British Gas shares would now have shareholdings in three companies - Centrica, National Grid and BG Group - if they had done nothing since the original privatisation.
Bulled says he has sold some of these privatisation holdings along the way, and added to them, particularly when the companies have issued new shares via rights issues. “I’ve both sold and bought these shares at various times. Of course performance has been mixed, but over the years they have been steady performers and made a good base for my share portfolio.”
Buy-to-Let Investments Mixed Success
In more recent years Bulled says has dabbled in the buy-to-let market. “Initially, this was simply out of necessity. My eldest daughter, Sophia, went to university in London six years ago, and the cost of renting was huge. In many cases the only affordable properties didn’t look either safe or secure.”
Bulled and his wife Linda decided to get a mortgage on a property in London, and rent this to their daughter and her friends. “This meant cheaper rent for my daughter, and we knew she was in a property that was properly maintained and secure.” The couple have continued to let the property. He says: “In many ways we were lucky. We bought just before prices boomed in London, and there hasn’t been one week where it has been void. Finding tenants has not been a problem.”
However, they didn’t have the same success with their second property. He explains: “My father in law died, and left my wife his bungalow, in Malden. But it was more difficult to rent, and what income we got barely covered the agents’ fees.” As a result they couple have sold the property and used the proceeds to help purchase a second property, in Tottenham, London.
He says: “Rather than lose 15% of the rent to an agent we now manage it ourselves. It is a lot of work, but we think it is worth it.”
