The UK version of target retirement 2045 holds 80% equity and 20% bonds, spread across various world markets and both corporate and government bonds, with an overweighting to both UK equity & bonds. That doesn't seem hugely different to what you have in your ISA? What's you reason for wanting to switch?
I understand that performance varies over time, but as I'm currently putting everything into my SIPP, it's disappointing to see gains of 1.97% compared to the 13.95% in my ISA. Am I just being impatient?
Yes. You are comparing gains over different time periods, and a big chunk of the difference is explained by what happened to the markets over that time period, not what you invested in. 6 or 18 months' returns is nowhere near long enough to evaluate the performance of a fund.
I thought the tapering towards bonds would add a little more security, but as 2045 is quite a way off I thought that perhaps I could afford to take a little bit more risk. Perhaps something like LS100 for the foreseeable future and then switch to something LS40 or LS20 in 2035 or even 2040.
I am a higher rate tax payer (but only just). Currently stashing 37.5% of net pay into my SIPP. I am expecting this to drop to 25% next year though as I have a child who will be going to nursery for 2 days per week. Not sure if that information is of any use.
There are two types of security. There is avoidance of year-to-year volatility (which bonds tend to reduce), then there is the risk of running out of money while you need it (which a very high % of bonds will increase, because the growth will be lower). For a SIPP, you know that you won't be spending any of it until age 55/58, and the majority of it won't be spend until years later, so volatility doesn't matter as much. Keeping a high level of growth is important to make sure that you don't run out of money. It can be useful to have some bonds, so that if the market drops dramatically you can sell the bonds and not the stocks (this won't work if you have a LS fund - but that is an issue for a much later date). I like around 20% bonds for drawdown, others say 40%, but 80% is atypically high.
It makes a huge difference to what I would do if I were you. Whether it makes a difference to what you want to do is up to you.
Money that would have been taxed at 40% is more valuable wrapped in a SIPP than money that would have been taxed at 20%. If you expect your salary to rise into the 40% bracket, I would seriously consider filling the ISAs and taxable accounts for now, and stash all your pay above the 40% tax band into the SIPP, as your pay increases this will get higher and higher.
Well done for doing what you've done so far. Living below your means so that you have money to save is around 90% of the work to prepare for FIRE; tweaking investments and tax wrappers is much less work, but does require some time to get your head around.
