Am I skating on thin ice?

steve638821

Hi all, not posted on this forum before and not that financially literate but I think I understand the basics.

I am due to take retirement towards the end of this year (at age 65) and have a pension amount of approximately £110k which was transferred from a company pension to a personal pension from Aegon a little after it was frozen. It now resides with Windsor Life. I haven't employed an IFA over its life and taking a risk I left it as it was invested in various equities so that even now that is the case. I was gambling on the market picking up which fortunately it has so the question is - should I immediately transfer to something solid like guilts or bonds to make good what gains I have got back from the nasty fall earlier? I suspect the answer will be yes and although there is still the possibility of further rises perhaps it is best to draw the line somewhere. I am struggling to find a suitable fund from those listed on the Windsor Life website so would appreciate some help. Probably a bit late to tell me to find an IFA as I have pretty well made up my mind what to do with the pension when the day comes.

Thanks, and very interesting reading this site is even if I don't understand most of it.

dunstonh

should I immediately transfer to something solid like guilts or bonds to make good what gains I have got back from the nasty fall earlier?

Normally you would expect to reduce the risk as you get closer.

I am struggling to find a suitable fund from those listed on the Windsor Life website so would appreciate some help.

Do you have access to unit linked funds or is it with profits only?

Probably a bit late to tell me to find an IFA as I have pretty well made up my mind what to do with the pension when the day comes.

You should still see an IFA. Windsor will only let you know their options. They wont let you know all your options, some of which could be better.

Interestedparty

I do think it would make sense to reduce the level of risk that you currently have with it all being invested in equities. Of course it is possible that markets will continue to rise but if they fall then your fund will fall with it. Assuming that there are no penalties involved I would suggest you switch into a cash fund with Windsor Life at the earliest possible opportunity rather than a gilt or bond fund as these also can and do fall in value.

By making this decision to switch into cash with interest rates being so low your fund will not grow in value between now and your retirement date so there may be an argument to start the ball rolling now as far as drawing benefits is concerned. Be certain to make your switch first as Windsor Life have not got the greatest reputation for speedy processing of these sort of issues.

As an IFA myself I would of course suggest that a chat with a suitably qualified and experienced IFA would make sense if only to confirm that what you intend doing is the right and most efficient way of taking your benefits.

cyclonebri1

Only you know your attitude to risk. If there is a rule it is this;
The closer you get to retirement. the less risk risk you should take, with a year to go, get the hell out of there, one terrorist act and kaboom, no disrespect intended. :o:o

steve638821

Thanks for the comments, the fund is unit-linked according to the literature and was a Pension Transfer Bond as I understand it and consisted of two parts, one being the Protected Rights part as we were contracted out of SERPS I think at the time. I think I can recognise the equities invested as being those from Aegon on the Units link from the site but if I do a transfer to cash to what account or fund would I chose? It is free to transfer a single time per year so presumably there will not be any charges.

steve638821

cyclonebri1 wrote: »

Only you know your attitude to risk. If there is a rule it is this;
The closer you get to retirement. the less risk risk you should take, with a year to go, get the hell out of there, one terrorist act and kaboom, no disrespect intended. :o:o

A lot less than a year and the risk was great but the alternative was even worse as I saw it. Just wondering how the election will affect matters ignoring the other risks which are not trivial I'm sure. I was quite surprsied actually to find the market at the level it currently is at to be honest.

cyclonebri1

steve638821 wrote: »

Thanks for the comments, the fund is unit-linked according to the literature and was a Pension Transfer Bond as I understand it and consisted of two parts, one being the Protected Rights part as we were contracted out of SERPS I think at the time. I think I can recognise the equities invested as being those from Aegon on the Units link from the site but if I do a transfer to cash to what account or fund would I chose? It is free to transfer a single time per year so presumably there will not be any charges.

Do you fully understand the protected rights aspect of your fund? This may be fundamental to you plans.

steve638821

cyclonebri1 wrote: »

Do you fully understand the protected rights aspect of your fund? This may be fundamental to you plans.

I'm single and in effect it can be treated the same as the other if I understand it correctly, i.e. I can take the lump sum of 25% on both, which I do need to do.

Interestedparty

As to which fund for a cash fund it's quite hard to work out which fund is available to you from looking at their website. Probably the easiest thing to do is to ring them and ask them what funds you can transfer to that are classed in the deposit sector and then choose one of those and complete the switching form on their website.

Whilst you have made up your mind about taking the maximum tax free cash sum don't forget you need to consider the open market option for choosing the right type and product provider for the annuity element of the decision

steve638821

Interestedparty wrote: »

As to which fund for a cash fund it's quite hard to work out which fund is available to you from looking at their website. Probably the easiest thing to do is to ring them and ask them what funds you can transfer to that are classed in the deposit sector and then choose one of those and complete the switching form on their website.

Whilst you have made up your mind about taking the maximum tax free cash sum don't forget you need to consider the open market option for choosing the right type and product provider for the annuity element of the decision

Thanks, I think you are right and it is time to approach them, I think I have the right form downloaded. Yes, I've been scouting around to find other sources for annuities and will compare these with what they will offer. The lump sum is to pay off existing debts and no other source of income is around that I could use. Plus the fact that it will provide some necessarary cash for maintainace on the house and other items.

dunstonh

steve638821 wrote: »

I'm single and in effect it can be treated the same as the other if I understand it correctly, i.e. I can take the lump sum of 25% on both, which I do need to do.

Is there any GMP on the pension? If there is, this may prevent you from having a 25% available on the whole fund if you take the pension with them. You can transfer on the open market option (full fund transfer version) but you may lose more than you gain (ie.. you would get your 25% on the full amount but the income may be significantly lower and not cost effective to do it).