L&G pension : lifestyle fund

james3333

guys,
i have a Legal & General pension (stakeholder) opened 6 months ago.
all my cash is in a 'lifestyle fund' and it doesnt seem to be doing anything.
i can see online the fluctuation everyday and more often than not the fund has less money in than my what i have put in.......is this nornal?
i have 15k from another pension going in next month (old pension has closed so ii have transfered it across) will this make a difference ?
should i be managing my fund myself?
if so any recommendations as to what to do, im a total beginner!

cheers.

dunstonh

all my cash is in a 'lifestyle fund' and it doesnt seem to be doing anything.

What do you think it should be doing?

i can see online the fluctuation everyday and more often than not the fund has less money in than my what i have put in.......is this nornal?

quite normal.

i have 15k from another pension going in next month (old pension has closed so ii have transfered it across) will this make a difference ?

Your value will initially go up by £15k. Then it will fluctuate in line with future returns and contributions.

should i be managing my fund myself?

Do you have the time and knowledge to be doing that?

if so any recommendations as to what to do, im a total beginner!

Beginners are best placed in the lifestyle fund.

james3333

Thanks for that, if the value goes down regularly and thats normal, wouldnt i be better lumping it all into an ISA over the coming years? at least i know i will get more back than i put in!......or am i missing something here?

dunstonh

if the value goes down regularly and thats normal, wouldnt i be better lumping it all into an ISA over the coming years?

That will give you straight line growth but over the long term will typically be lower.

If you picture a graph in your head with two lines. The cash line will be very straight and generally have a low rate of return but consistent. The investment line will zig zag. On some occasions the zig zagging will be extreme and could go below the cash line or well above it. As time goes on you would expect the gap between the zig zag line to increase over the cash line.

at least i know i will get more back than i put in!.

Problem with that is that you are replacing investment risk with shortfall risk and inflation risk. You would have to pay in about 50% more than the investment one because you know for a fact that the ISA would not be enough. Whereas the investment may not be enough but it might be.

L&G do a few lifestyle funds to cover a range of risk profiles. You should go with the one that is appropriate for your level of risk tolerance.

james3333

.....could i ask too......... i have a retirement age of 65 on this L&G pension.
could i make my retirement ages earlier?........if so, how would this affect everything?
im 32 years old and i dont know anything about retireing yet...... just that the state retirement age is 65.

cheers

dunstonh

i have a retirement age of 65 on this L&G pension.
could i make my retirement ages earlier?

The age 65 thing is just an indication. Its not cast in stone. I set most of mine up to 75 nowdays. You could ask them to adjust it but it wont make any difference.

im 32 years old and i dont know anything about retireing yet...... just that the state retirement age is 65.

Some bad news for you. Your state pension age is 67. Not 65.

james3333

oh, blimey............. 67...........well hopefully i will have enough in the pension to retire earlier anyway!...........best start lupming more cash in

cheers

Batchy

im in exactly the same boat...
if you feel there is an impending CRASH looming, get it out, put it in the lowest risk going...

Then when you feel things are great transfer it back to higher risk as it suits.

I think L&G allow one transfer a year... so based on the above you should be fine... but sometimes good gains to be made after a big fall, so you'd have to time it very well.

At the moment mine is not doing great, only grown about 5% over the last 6 months but still, you have an instant tax benefit over the ISA, either 20% or 40%.

Good luck, and relax, let the fund do its thing, just make sure that the fund itself is BIG ENOUGH... if everyone else has taken investments elsewhere, whats the point of you staying in on your own basically?

Shimrod

Batchy wrote: »

I think L&G allow one transfer a year..

At the moment mine is not doing great, only grown about 5% over the last 6 months but still, you have an instant tax benefit over the ISA, either 20% or 40%.

Using the online system, you can move you funds (and future allocations) around with L&G as often as you wish.

And since when did 5% over six months become a bad growth rate in a long term investment?