Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • MrStanners
    • By MrStanners 18th Mar 17, 9:52 AM
    • 29Posts
    • 4Thanks
    MrStanners
    Short-tem SIPP investment
    • #1
    • 18th Mar 17, 9:52 AM
    Short-tem SIPP investment 18th Mar 17 at 9:52 AM
    Hi,

    I'm planning to leave work next year, I have a DB pension and SIPP. I also have a recent state pension forecast.

    Instead of drawing my DB pension immediately my plan is to take my 25% tax free lump sum from the SIPP and then make withdrawals, up to the personal allowance, from the SIPP so I pay no income tax. I'll dip into my cash savings as necessary. After about 5 years I'll then start taking my deferred DB pension. To maximise my pension tax-free allowance I'm putting in a lump sum into the SIPP up to my gross earnings to get the tax contribution. I did the same thing last year.

    My question is:
    What's the best place for money in my SIPP since I'll be taking it out soon? Currently I'm about 60/40 equities to bonds but with equities and bonds going up and up I'm a bit nervous about putting more into them. So I was thinking of an Absolute Return Fund or Cash Fund.

    As I see it a cash fund should be safe but the return will probably only just about cover the fund fees so it will actually lose value due to inflation. Absolute funds seem more adventurous, certainly more expensive, but they also seem much more complicated and dependent upon good fund management to get it right.

    Any views about Absolute Return funds?

    The alternative is to not top up my SIPP, but it seems silly not getting the tax contribution and even in a Cash Fund I should benefit.
    Thanks.
Page 1
    • Linton
    • By Linton 18th Mar 17, 10:16 AM
    • 7,495 Posts
    • 7,240 Thanks
    Linton
    • #2
    • 18th Mar 17, 10:16 AM
    • #2
    • 18th Mar 17, 10:16 AM
    You could look at the wealth preservation fund and investment trusts. Unlike the Abs Return funds all were around in 2007/9 so you can see how they performed under difficult conditions using Trustnet/Tools/Charting.

    Trojan O

    Personal Assets Trust
    Ruffer Investment Trust
    RIT Capital Partners IT
    Capital Gearing IT

    If you are drawing down money to spend, rather than to reinvest in S&S ISAs, in 5 years time it would be prudent to leave perhaps 2 years requirements as cash.
    • ischofie1
    • By ischofie1 18th Mar 17, 10:49 AM
    • 133 Posts
    • 105 Thanks
    ischofie1
    • #3
    • 18th Mar 17, 10:49 AM
    • #3
    • 18th Mar 17, 10:49 AM
    Have you considered P2P?
    • MrStanners
    • By MrStanners 18th Mar 17, 11:02 AM
    • 29 Posts
    • 4 Thanks
    MrStanners
    • #4
    • 18th Mar 17, 11:02 AM
    • #4
    • 18th Mar 17, 11:02 AM
    Thanks for the suggestions. I had forgotten about investment trusts.
    • MrStanners
    • By MrStanners 18th Mar 17, 11:10 AM
    • 29 Posts
    • 4 Thanks
    MrStanners
    • #5
    • 18th Mar 17, 11:10 AM
    • #5
    • 18th Mar 17, 11:10 AM
    I hadn't considered p2p tbh. I can see that Ratesetter have connections with some SIPP providers but I'm not too keen on opening a second SIPP, I'll have a further read up but I'd prefer to rationalise my savings and investments and pensions than have yet more accounts. Also I've been winding down my p2p investment.
    Thanks for the suggestion.
    • Linton
    • By Linton 18th Mar 17, 11:20 AM
    • 7,495 Posts
    • 7,240 Thanks
    Linton
    • #6
    • 18th Mar 17, 11:20 AM
    • #6
    • 18th Mar 17, 11:20 AM
    Have you considered P2P?
    Originally posted by ischofie1
    Can you access P2P from a SIPP? Googling suggests that the FCA are not happy about this and that at least one provider who did offer it has closed to new business.
    • MrStanners
    • By MrStanners 18th Mar 17, 11:49 AM
    • 29 Posts
    • 4 Thanks
    MrStanners
    • #7
    • 18th Mar 17, 11:49 AM
    • #7
    • 18th Mar 17, 11:49 AM
    The Ratesetter website says that their investments can be held in a SIPP.
    I'd never heard of their SIPP providers and when I found one provider that listed their charges I decided it wasn't suitable for me and my short term needs.
    • koops
    • By koops 18th Mar 17, 1:10 PM
    • 21 Posts
    • 1 Thanks
    koops
    • #8
    • 18th Mar 17, 1:10 PM
    • #8
    • 18th Mar 17, 1:10 PM
    Hello,my wife is in a similar situation to'Mrstanners' in that she wants to pump savings into a SIPP for three or so years so as to benefit from the tax relief.Being new and a little nervous of the choices of investment involved,would HL's own choice portfolio be it Conservative low risk or Balanced medium risk be a good option for a beginner?
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

173Posts Today

1,405Users online

Martin's Twitter
  • RT @EmmaDark30: @MartinSLewis off on holiday next month all paid for with free cash for switching bank accounts! Thank you!

  • MSE weekly email: Big Energy Switch 7, £5 Next/Zara etc, buy euros now?, 10xNectar, 2for1 gardens, urgent easyjet https://t.co/bS4J70hBbx

  • Today's Twitter poll 2: following on, which of these professions would you trust least if you were using their services?

  • Follow Martin