Norwich Union Portfolio Step-down: any good for income for a 63-yr-old?

Should I keep this investment going?

The charges drop after the 5th anniversary and you have access to the whole fund range. So, there is scope to keep the wrapper and product but pick the investment funds you want.

At present I do not have a need to access the money but there is a possibility it might be needed in 3-4 yrs if we move house.

Thats a key consideration. Not ideal to start either the WP inflation guarantee or a guranteed fund as the guarantee point if the 5th anniversary. The other unit linked funds are open ended but you need to think about flucutations and 3-4 years is not ideal. Although we are at a low point which could recover in that timescale somewhat but may take longer or could get worse before it gets better.

The product is fine, the available fund choice is good but whether it fits with your timescale and risk profile is where you have to think about it.

The Guaranteed fund is capital guaranteed and will mature on the 5th anniversary with a minimum of your original investment. Any action you take in the interim means you lose the guarantee.

I cant see any reason to change it to be honest.

That Guaranteed 4 mixture looks like a good one for 18 months ago since it should have dropped less than one with more equities in it, not that that matters with the guarantee. It doesn't look like a good one to be switching into in February because share prices look likely to be near a low point, so there seems good potential to grow by using more equities (though with the usual risk that they might not - predicting the future is imperfect ).

It looks like a bad time to be buying UK gilts, with high demand now and high supply in the future both likely to hurt returns.

The may move house bit is a concern with a three year horizon because equities might be lower then or stable. My guess is that lots of UK and global corporate bonds will be reasonably stable with decent gain potential and maybe 20% downside potential - but I think most of that has already been seen.

If you don't need this particular chunk of money in that timeframe with a high chance of little value drop then a UK and global equities and UK and global corporate bonds mixture looks to have quite a lot of growth potential.

Basis for these views is:

1. High demand for gilts now has driven prices high and yields low, supply rises to finance government spending aren't going to help yields or price.
2. Concern over company stability has pushed corporate bond prices down and yields up, so capital values should see some growth when the world doesn't end after all. Should be a good choice for your stability needs.
3. Equity prices are down and should recover but knowing when is the hard part. Maybe 2009-10 but 3-5 years seems like a more safe speculation and the next high seems likely to be later than that. Useful for the longer term if you don't need the money - or can risk lots of sideways and maybe some down price movement over three years in case that is what happens.

But that's trying to predict the future, a notoriously hard thing to get right. So make what you will of it and decide for yourself.

I'm assuming that the possible property need means that you won't be buying a new product with a capital guarantee.

Thanks dunstonh and jamesd.
I have no plans to touch my later NU bond before 5 yrs are up, as far as I know at present.
When my smaller one comes up to its 5yr guarantee in February, I have the option of putting it into the guaranteed 4 fund without any penalties for withdrawing within the 5 yrs if I need to, presumably with asset allocation as above.
Or I can re-invest into NU( or anywhere else for that matter ) with my own choice of funds allocation. As I am not knowledgable about funds I just wanted some opinions before I speak to my IFA next week.