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    • workingboy
    • By workingboy 9th Oct 17, 10:33 PM
    • 181Posts
    • 6Thanks
    workingboy
    Your opinions please - increasing risks
    • #1
    • 9th Oct 17, 10:33 PM
    Your opinions please - increasing risks 9th Oct 17 at 10:33 PM
    I have 3 pensions

    1) State pension
    2) Final salary pension
    3) Pension via 'Vanguard'

    Knowing nothing much can be changed with the State or Final salary pensions.

    But my 3rd pension is in 'Vanguard' at a 40% risk factor as advised by my IFA 2 years ago from a questionnaire.

    I am due a review shortly.

    Can I ask as to whether I should leave my risk at 40% or what your feelings are of the current and future stock market trends of increasing my risks to 50 or 60%.

    Asking as a second opinion before my review with my IFA as I have no experience in this field only by advice of others.
Page 1
    • enthusiasticsaver
    • By enthusiasticsaver 9th Oct 17, 11:27 PM
    • 4,841 Posts
    • 9,146 Thanks
    enthusiasticsaver
    • #2
    • 9th Oct 17, 11:27 PM
    • #2
    • 9th Oct 17, 11:27 PM
    Not sure what you mean by a Vanguard at 40% risk. Are you saying you are willing for the portfolio to drop by 40% before panicking and selling out? Or are you talking about Vanguard lifestrategy fund 40 which is something totally different?

    No one can predict stock market trends although many people seem to think they can so what risk profile you use when investing is totally personal and depends on your attitude to risk.
    1 week to go until early retirement. Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • EdSwippet
    • By EdSwippet 9th Oct 17, 11:46 PM
    • 625 Posts
    • 586 Thanks
    EdSwippet
    • #3
    • 9th Oct 17, 11:46 PM
    • #3
    • 9th Oct 17, 11:46 PM
    Can I ask as to whether I should leave my risk at 40% ...
    Originally posted by workingboy
    I think what you are asking here is, Can I treat my final salary and state pensions as if they were bonds?

    If that's your question, the answer is that yes, up to a point you can. At the extreme, if these other two pensions together are enough to cover all your living expenses in retirement then you can technically afford to move to 100% stock risk in your defined contribution pension.

    That is not to say that you necessarily should increase risk here -- your stock allocation level is still determined by all three of your willingness, need, and ability to take on stock market risk. But with a decent final salary pension alongside your state pension, your need for market risk is lower than it otherwise might be, and your ability to take risk is correspondingly higher.
    • bostonerimus
    • By bostonerimus 10th Oct 17, 1:00 AM
    • 1,215 Posts
    • 668 Thanks
    bostonerimus
    • #4
    • 10th Oct 17, 1:00 AM
    • #4
    • 10th Oct 17, 1:00 AM
    How much of your retirement income requirements will SP and final salary pension cover? If it is close to 100% then I say you can take a lot of risk with the remaining Vanguard pension and have a high percentage of equities.
    Misanthrope in search of similar for mutual loathing
    • workingboy
    • By workingboy 10th Oct 17, 11:13 AM
    • 181 Posts
    • 6 Thanks
    workingboy
    • #5
    • 10th Oct 17, 11:13 AM
    • #5
    • 10th Oct 17, 11:13 AM
    My pension company 'Old Mutual' by the advice of my IFA invests my fund with the Vanguard scanner at a risk of 40% and the rest at various other investment funds.

    I was advised to leave my State and Final salary pensions as they are.

    I did a questionnaire for the IFA basically to find what risk I would take and that time it was 40%. They said this would be put onto the Vanguard scanner, which scans the whole market and makes changes as seen fit with the 40% in that scanner.

    thanks for your replies
    • AlanP
    • By AlanP 10th Oct 17, 1:11 PM
    • 993 Posts
    • 704 Thanks
    AlanP
    • #6
    • 10th Oct 17, 1:11 PM
    • #6
    • 10th Oct 17, 1:11 PM
    Your age and your planned retirement / pension access plan will also be factors.

    SP has a defined Age (although it may move depending on how close to drawing it you are).

    DB/FS pension will have a defined Age but can be taken early, albeit at a reduced annual amount to balance out the longer period of time it will be in payment for.

    SIPP/PP - Can be taken from Age 55 at present (but that could increase).

    What many do is use the SIPP/PP pot to fund a period of time between stopping work and starting DB/FS scheme and/or State Pension Age.

    Objective being to get a smooth income that meets your needs as opposed to getting it all in one go - unless that is your retirement target date or course.

    So while thinking of the FS & SP elements as "safe" options, which they are, so you can take loads of risk with the PP is an option thinking about the timings of when you want to start accessing the pots should be factored in.

    Having 100% equities in your PP, so "High Risk" when you want to start accessing it in 2 years time say and won't have any (or enough because FS has been subject to actuarial reduction) other pension income available would be extremely risky as markets could drop and take 2+ years to recover so need to stay at work longer.
    Last edited by AlanP; 10-10-2017 at 1:15 PM.
    • Audaxer
    • By Audaxer 10th Oct 17, 1:17 PM
    • 644 Posts
    • 286 Thanks
    Audaxer
    • #7
    • 10th Oct 17, 1:17 PM
    • #7
    • 10th Oct 17, 1:17 PM
    My pension company 'Old Mutual' by the advice of my IFA invests my fund with the Vanguard scanner at a risk of 40% and the rest at various other investment funds.

    I was advised to leave my State and Final salary pensions as they are.

    I did a questionnaire for the IFA basically to find what risk I would take and that time it was 40%. They said this would be put onto the Vanguard scanner, which scans the whole market and makes changes as seen fit with the 40% in that scanner.

    thanks for your replies
    Originally posted by workingboy
    I've never heard of a Vanguard scanner. Is this from the same Vanguard fund house that offers the LifeStrategy funds below?
    https://www.vanguardinvestor.co.uk/what-we-offer/life-strategy-products
    • bostonerimus
    • By bostonerimus 10th Oct 17, 1:42 PM
    • 1,215 Posts
    • 668 Thanks
    bostonerimus
    • #8
    • 10th Oct 17, 1:42 PM
    • #8
    • 10th Oct 17, 1:42 PM
    My pension company 'Old Mutual' by the advice of my IFA invests my fund with the Vanguard scanner at a risk of 40% and the rest at various other investment funds.

    I was advised to leave my State and Final salary pensions as they are.

    I did a questionnaire for the IFA basically to find what risk I would take and that time it was 40%. They said this would be put onto the Vanguard scanner, which scans the whole market and makes changes as seen fit with the 40% in that scanner.

    thanks for your replies
    Originally posted by workingboy
    If you are paid up on your state pension the only option you really have if to defer it.
    The DB pension advice might or might not be good depending on the CETV
    If the investment is essentially to put it in something like VLS40 then that's hardly rocket science. Looks like I'm in the wrong job..........
    Misanthrope in search of similar for mutual loathing
    • coyrls
    • By coyrls 10th Oct 17, 3:05 PM
    • 922 Posts
    • 967 Thanks
    coyrls
    • #9
    • 10th Oct 17, 3:05 PM
    • #9
    • 10th Oct 17, 3:05 PM
    I've never heard of a Vanguard scanner. Is this from the same Vanguard fund house that offers the LifeStrategy funds below?
    https://www.vanguardinvestor.co.uk/what-we-offer/life-strategy-products
    Originally posted by Audaxer
    At a guess, they might mean Vanguard's Risk Profiling tool here: https://www.vanguard.co.uk/adviser/adv/adviser-support/resources/tools but you need an adviser's login to access it.
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