Adding to a Scottish Widows Pens Portfolio Two

2

Comments

  • ex-pat_scot
    ex-pat_scot Posts: 686
    First Anniversary Photogenic First Post Name Dropper
    Forumite
    My company pension is also a SW series 2 GPPP.
    I have selected an adventurous basket of funds from within the selection, albeit I can't access the Vanguard ETF series (which would be my default option, if available). I can live with that restriction, for the sake of the company contribution and sal sac arrangement.


    When I leave my present employer, I will be transferring straight out of SW and into my existing SIPP, and into VWRL (with a side salad serving of gold etf)
  • Bravepants
    Bravepants Posts: 1,490
    First Anniversary First Post Name Dropper Photogenic
    Forumite
    cambs1999 wrote: »

    Can you also advise as to a reasonable amount he should be aiming for to enable him to have a reasonable income in retirement, I.e £300,000/£400,000 etc? He currently has around £170,000 ish over 3 similar set ups to the Scottish Widows one.

    Thanks again.

    Some of the figures for safe drawdown rates bandied around the Internet are 3% to 4% per annum, So on a £300k pot you could draw down £9k per annum to £12k, of course the smaller the amount the longer your pot will last and grow above inflation (depending on how you invest once you go into drawdown).
    If you want to be rich, live like you're poor; if you want to be poor, live like you're rich.
  • sebthered wrote: »
    I have just turned 55 and I note that my contributions are now being allocated 95%Pens Portfolio 3 and 5% pens 4, which presumably is lower risk. You can of course allocate your payments to any fund/portfolio they hold at anytime.
    Yes, at some point lifestyling kicks in if you have an investment approach selected.
  • sebthered wrote: »
    My company pension comprises this fund, 55% pens three- 45% pens 2 - I looked up the details recently here is the link -
    https://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=qgf29&univ=P

    I have just turned 55 and I note that my contributions are now being allocated 95%Pens Portfolio 3 and 5% pens 4, which presumably is lower risk. You can of course allocate your payments to any fund/portfolio they hold at anytime.


    As mentioned by the previous poster, Lifestyling option may have kicked in, however, I thought with this option existing funds would be transferred to the lower risk funds, not just new contributions, or is this an option also with Lifestyling?
  • Linton
    Linton Posts: 17,064
    Name Dropper First Post First Anniversary Hung up my suit!
    Forumite
    cambs1999 wrote: »
    ......
    Can you also advise as to a reasonable amount he should be aiming for to enable him to have a reasonable income in retirement, I.e £300,000/£400,000 etc? He currently has around £170,000 ish over 3 similar set ups to the Scottish Widows one.

    When planning retirement the first task is to determine what you consider to be a reasonable total income. A good first guess is to take what you are spending now and remove those things you wont need to pay for in retirement - pensions, mortgage, work expenses, children. You may then wish to increase your estimate. I suggest you dont try to reduce it without first reducing your actual expenditure now to see how you would cope. Then you need to increase your estimate by the estimated inflation between now and retirement.

    Next job is to work out how you are going to fund it. This funding will come from personal/DB pensions, State Pension and savings. An order of magnitude guess for the lump sum you will need is about 30X that part of the income it will have to pay for. This will include a reasonable chance of matching inflation. You will have to add extra if you want to retire before you reach State Pension Age and DB Pension Age.
  • cambs1999
    cambs1999 Posts: 32
    First Post First Anniversary Combo Breaker
    Forumite
    Thanks for all your replies.

    Sorry... But I don't really understand the previous posters comments about the lump sum you will needs needs to be 30x that part of income etc.

    Can you explain this in a bit more detail please?

    I think we would want an income of around £1500 per month as a minimum.

    If we get a state retirement pension we should be ok but I'm worried by the time we retire it won't exist - anyone got any opinion on this?
    Thanks for all your help.
  • bigadaj
    bigadaj Posts: 11,531
    Name Dropper First Post First Anniversary
    Forumite
    cambs1999 wrote: »
    Thanks for all your replies.

    Sorry... But I don't really understand the previous posters comments about the lump sum you will needs needs to be 30x that part of income etc.

    Can you explain this in a bit more detail please?

    I think we would want an income of around £1500 per month as a minimum.

    If we get a state retirement pension we should be ok but I'm worried by the time we retire it won't exist - anyone got any opinion on this?
    Thanks for all your help.

    The lump sum comes from safe withdrawal rates during drawdown from a pension, thirty times you annual needs equates to a figure of between 3&4% which is also quoted abive and is what many people might consider a good rate that won't erode capital and be sustainable for a few decades.

    However if you are in a final salary or defined benefit scheme then you just take what you get.

    There's always talk of the state pension being removed, the recent changes to the single tier pension have potentially made it more sustainable and certainly clearer for most, so it's likely to conti us in the medium term, and po ably in the longer term as older people tend to vote in larger numbers.
  • cambs1999
    cambs1999 Posts: 32
    First Post First Anniversary Combo Breaker
    Forumite
    Thanks. So if we want around £1500 pm does this mean 30 x £1500 so an annual pension income of £45,000?
  • cambs1999
    cambs1999 Posts: 32
    First Post First Anniversary Combo Breaker
    Forumite
    Sorry just read it again, is it £1500 x 12 for annual then x 30 so a pension pot of £540,000?
  • michaels
    michaels Posts: 27,949
    Photogenic Name Dropper First Anniversary First Post
    Forumite
    I was playing with the SW lifestyling tool on their website this afternoon. Having answered some very innumerate questions that were supposed to pick up my attitude to rsik they put me in the middle of their rik profile bands and told me that between 15 and 10 years before retirement I should switch from portfolio 2 to portfolio 3 and then over the next 5 years into portfolio 4 etc.

    Portfolio 2 has made pretty good returns over the last year but on most measures performance has been slightly below average over most time frames. Personally I hold with efficient market hypothesis so put above average returns down to luck plus higher risk rather than alpha so am happy with sw.
    I think....
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 342.5K Banking & Borrowing
  • 249.9K Reduce Debt & Boost Income
  • 449.4K Spending & Discounts
  • 234.6K Work, Benefits & Business
  • 607.1K Mortgages, Homes & Bills
  • 172.8K Life & Family
  • 247.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards