Should he transfer to a lower risk fund

Savvy_amateur

Hi Everyone

My husband has just had a letter from Abbey Life to ask if he wants to transfer his pension investments to a lower risk fund for the remaining 5 years. What do you think?

dunstonh

My husband has just had a letter from Abbey Life to ask if he wants to transfer his pension investments to a lower risk fund for the remaining 5 years. What do you think?

Depends on his risk profile, if he intends to retire in 5 years and how much he can afford to take risks or not.

Risk reduction as you get closer to purchasing the annuity does make sense. However, you have to consider how gradual you are going to do it and does it really make sense to start after a market has dropped or not.

Savvy_amateur

dunstonh wrote: »

Depends on his risk profile, if he intends to retire in 5 years and how much he can afford to take risks or not.
quote]

Couldn't really do with it going down much, but how big a risk is it? The fund is only currently worth around £60p.w. Off the record what do you think?

dunstonh

but how big a risk is it?

Depends on where it is currently invested. It also depends on his attitude to risk and how he believes things will be in the coming years (and if he is able to understand how the markets act in current events - some people cant understand why the markets have gone up 20% recently whilst the news appears to be all doom and gloom).

Off the record what do you think?

personally, i would want to be in control and would reduce the risk gradually and not all in one go. I would probably wait until later in the year before starting.

Savvy_amateur

Thanks very much for your help. really appreciate it

EdInvestor

dunstonh wrote: »

personally, i would want to be in control and would reduce the risk gradually and not all in one go. I would probably wait until later in the year before starting.

Agreed, the market seems to be recovering gradually now, so why not wait a bit, rather than sell now and lock in losses.This is one of the disadvanatges of the so-called "lifestyle" option with pensions which is supposed to reduce risk - if the timing is wrong you can lose quite a lot. There's no real substitute for paying attention to your money.

exil

If anyone could REALLY answer this question - should we now go for lower risk or sit tight with our ISAs etc - they could make a few million a year advising people rather than giving free advice here.I'm down about 18k in the last 2 years but still smiling - through gritted teeth. Should I sell the lot? In which case I have no chance of making good the loss. Or keep going? If I do - have the markets really bottomed out or not? I can't advise ME let alone anyone else.