Standard Life Balanced Lifestyle Profile

trifficks

My company pension is invested in SLBLP which includes their Pension Sterling Fund - Hargreaves Lansdown inform me this is performing badly (drop of 4.8% overnight) and that my company are putting new recruits into Balanced II Lifestyle Profile.

Any suggestions on what I should do (Aged 50 investing 15% of salary)

jh2009

The lifestyle is not an investment but a vehicle used that puts your contributions into different investments during your lifetime. The nearer you get to retirement, then your investments are transferred to less riskier investments.

The Balanced lifestyle and balanced lifestyle 2 you mention are practically the same. The only difference being the fund used to invest in the last year or so before your retirement (which will be your pension schemes normal retirement date).

The Balanced profiles uses the sterling fund in the last year or so, which was marketed by Standard Life as a fund mainly invested in short term cash type investments. But last year standard life were found to be investing some of this in mortgage/loan based investments. This was ok until the recent economic crisis and the loss in value in these assets they reduced then the unit price of this fund (probably the 5% fall you mention). A huge outcry followed, (as many believed the sterling fund to only invest in cash type investments and told it was a safe place to invest) and standard life then reversed this cut at their own expense.

They however decided to not change the investments in the sterling fund. This means the the sterling fund, could be volatile in future years, and how volatile is unclear.

They introduced a fund called the Managed Cash Fund as an alternative. This is the fund that solely invests in cash type products.

So if you have a choice between the two lifestyles, what are you choosing?

Well

1. Both will invest in exactly the same type of investments until you are within a year of your Normal Retirement DAte, (or other specified retirement date if you have told standard life you are going to retire at say 55).

2. In the last year/months until retirement:

The Balanced lifestyle uses the sterling.

The Balanced 2 Lifestyle uses the managed cash fund.

3. Thats really the only main difference.

So its really a choice of how satisfied you are with the fact your investments close to retirement will go to the Sterling fund in the last year/few months before your retirement, or whether you;d prefer the managed cash fund to be used. Many schemes are offering members the chance to decide whether to change lifestyles or not , and are putting new members into the balanced 2 lifestyle as a result.

EdInvestor

What a palaver when the issue boils down to choosing one of two cash funds for a (probably small) part of your investment.:rolleyes: