Options question and lifestyle fund

wizard5353

Some advise needed.

Hi all, I help some help as my employer is trying to force me in to a lifestyle tracked pension. This type is based on your age and at a young age it put your funds in to high risk options and slowly reduces them as you get closer to retirement age. At first I thought it was tracked against the market but I'm told no this is not the case. It dumps everything in to high risk shares at the start and then 6 years before retirement age it dumps everything in to cash bonds. There is no human intervention and no tracking at all. I think this is a bad idea, should I stay away from it?

Also because of the current economic problems my pension fund is down 27% from what I put in. I am not retiring anytime soon but should I just leave the investment options as they are or should I make a few changes now till the market gets back on it's feet?

Regards,

dunstonh

At first I thought it was tracked against the market but I'm told no this is not the case. It dumps everything in to high risk shares at the start and then 6 years before retirement age it dumps everything in to cash bonds.

You will probably find that the "high risk shares" you talk about is a tracker or passive managed fund and does defaqto track the market. Therefore not high risk but medium/high. The idea of lifestyling is to automatically reduce the risk as you get closer to retirement without requiring any human intervention.

I think this is a bad idea, should I stay away from it?

Why do you think that is a bad idea?

Also because of the current economic problems my pension fund is down 27% from what I put in. I am not retiring anytime soon but should I just leave the investment options as they are or should I make a few changes now till the market gets back on it's feet?

Events like this occur on average every 6-7 years. What did you do in the last downturn 7-8 years ago?

What investment options are there?

MikeJones_2

Does the pension product provide you with access to a selection of other funds which you might be able to invest within?

Does your employer provide you with access to a financial adviser?

You seem interested enough in your pension to at least understand some of the implications of risk and return. Why not consider spending just a little time each month learning more about your pension and retirement planning in general. You may find you enjoy it and begin to take a more active roll in where your pension contributions are going and how they are performing.

Think about your pension as your wages in retirement - whatever you build up might have to last you for a very long time.

Mike Jones

I work in the field of Pension Education and Pension Guidance in the UK. I am a current member of the Specialist Pensions Forum as well as being a Voluntary Adviser for The Pensions Advisory Service. I work with scheme members, employers, trustees, scheme administrators and advisers on most things to do with employer sponsored pension schemes. The views expressed by me in this thread are my personal opinions. You should seek professional advice from an appropriately experienced and qualified adviser. I am not an IFA.