Pension...which fund??
Discussion
Hi All
After much wrangling and stress, a final salary lump sum will shortly be paid into my current employer's DC scheme. It's a very large sum of money, and I'm about 7 years away from retirement.
As it stands, it will be split 35/65 UK/World (ex-UK) passive equity funds.
Given the state of the world, is this really not a good idea?
There are a number to choose from....equities from every region imaginable, corporate bonds, lifestyle/pre-retirement, index-linked gilts and property.
Should I be looking to put the money somewhere else in the first instance? It can be moved easily enough at a later date.
Thank you
After much wrangling and stress, a final salary lump sum will shortly be paid into my current employer's DC scheme. It's a very large sum of money, and I'm about 7 years away from retirement.
As it stands, it will be split 35/65 UK/World (ex-UK) passive equity funds.
Given the state of the world, is this really not a good idea?
There are a number to choose from....equities from every region imaginable, corporate bonds, lifestyle/pre-retirement, index-linked gilts and property.
Should I be looking to put the money somewhere else in the first instance? It can be moved easily enough at a later date.
Thank you
You've consulted with an IFA as the DB lump sum is substantial - out of curiosity what is their view?
You could park it in cash for a while, but if the pound crashes further then you lose out.
You could buy US weighted index funds (even global all caps are us weighted), and if the pound crashes further you're better off (but exposed to share price movement). If the pound recovers then you can be worse off.
You could buy bonds, gilts etc. Lower risk but still some exposure
You could spread investments across all three to try and keep things stable for now
You could park it in cash for a while, but if the pound crashes further then you lose out.
You could buy US weighted index funds (even global all caps are us weighted), and if the pound crashes further you're better off (but exposed to share price movement). If the pound recovers then you can be worse off.
You could buy bonds, gilts etc. Lower risk but still some exposure
You could spread investments across all three to try and keep things stable for now
Hi
The IFA guidance is over 6 months old but I have checked to see if he thinks it's still the right answer.
His current recommendation is:
50% World (ex-UK) Equity - Passive
12.5% European (ex-UK) Equity - Passive
12.5% North American Equity - Passive
12.5% Index-Linked Gilts
12.5% UK Corporate Bond - Passive
The IFA guidance is over 6 months old but I have checked to see if he thinks it's still the right answer.
His current recommendation is:
50% World (ex-UK) Equity - Passive
12.5% European (ex-UK) Equity - Passive
12.5% North American Equity - Passive
12.5% Index-Linked Gilts
12.5% UK Corporate Bond - Passive
Double Fault said:
Hi
The IFA guidance is over 6 months old but I have checked to see if he thinks it's still the right answer.
His current recommendation is:
50% World (ex-UK) Equity - Passive
12.5% European (ex-UK) Equity - Passive
12.5% North American Equity - Passive
12.5% Index-Linked Gilts
12.5% UK Corporate Bond - Passive
The IFA seems to have a dislike for UK equity then The IFA guidance is over 6 months old but I have checked to see if he thinks it's still the right answer.
His current recommendation is:
50% World (ex-UK) Equity - Passive
12.5% European (ex-UK) Equity - Passive
12.5% North American Equity - Passive
12.5% Index-Linked Gilts
12.5% UK Corporate Bond - Passive
Odd as it's a market home to global companies and a decent source of dividend income for when you want to start taking an income without selling units.drmotorsport said:
The IFA seems to have a dislike for UK equity then Odd as it's a market home to global companies and a decent source of dividend income for when you want to start taking an income without selling units.
I think it's because my pension fund, prior to this lump sum, already has over 200k in UK equities. Odd as it's a market home to global companies and a decent source of dividend income for when you want to start taking an income without selling units.Either that or he's a staunch Remainer who thinks we're going down the toilet
Double Fault said:
Hi
The IFA guidance is over 6 months old but I have checked to see if he thinks it's still the right answer.
His current recommendation is:
50% World (ex-UK) Equity - Passive
12.5% European (ex-UK) Equity - Passive
12.5% North American Equity - Passive
12.5% Index-Linked Gilts
12.5% UK Corporate Bond - Passive
Just a thought, is there really any need for the separate 12.5% European EX UK and 12.5% North American Equity allocations respectively when you could simply have 75% in the World (ex-UK) Equity fund? Nothing wrong with your IFAs portfolio, just thinking from a simplicity and ongoing maintenance perspective. However I am not an IFA and he/she may have a reason for those specific tilts.The IFA guidance is over 6 months old but I have checked to see if he thinks it's still the right answer.
His current recommendation is:
50% World (ex-UK) Equity - Passive
12.5% European (ex-UK) Equity - Passive
12.5% North American Equity - Passive
12.5% Index-Linked Gilts
12.5% UK Corporate Bond - Passive
drmotorsport said:
Double Fault said:
Hi
The IFA guidance is over 6 months old but I have checked to see if he thinks it's still the right answer.
His current recommendation is:
50% World (ex-UK) Equity - Passive
12.5% European (ex-UK) Equity - Passive
12.5% North American Equity - Passive
12.5% Index-Linked Gilts
12.5% UK Corporate Bond - Passive
The IFA seems to have a dislike for UK equity then The IFA guidance is over 6 months old but I have checked to see if he thinks it's still the right answer.
His current recommendation is:
50% World (ex-UK) Equity - Passive
12.5% European (ex-UK) Equity - Passive
12.5% North American Equity - Passive
12.5% Index-Linked Gilts
12.5% UK Corporate Bond - Passive
Odd as it's a market home to global companies and a decent source of dividend income for when you want to start taking an income without selling units.Double Fault said:
Agree and will probably combine them.
Any thoughts on UK corporate bonds or index-linked gilts?
It's probably worth pushing the IFA until you are satisfied with the answer.Any thoughts on UK corporate bonds or index-linked gilts?
Index-linked gilts have featured in the news recently
https://www.trustnet.com/news/13330704/the-funds-h...
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