NPI Self Employed Retirement Plan

ianpalmer2007

Hi - I have a plan that I can take this month at aged 60 - fund value is £40,000 or a guaranteed pension of £2640

I intend to transfer the full value to my Std Life Pension Fund where I have a fund of £105,000 and I can change / pick the investment funds.

I believe I will see a 10% increase in my Std Life Fund and I would then take the pension in a year or two - when the FTSE is at 6600 again.

My question is can anyone see anything terribly wrong with this strategy or should I leave the £40,000 with Pearl / NPI???

dunstonh

My question is can anyone see anything terribly wrong with this strategy or should I leave the £40,000 with Pearl / NPI???

Normally people reduce their risk as they get closer to retirement. You seem to want to remain with a medium/high risk investment right up to commencement. Are you sure you want to risk your retirement income that way?

Or are you planning to utilise the unsecured income option and remain invested during retirement? (rather than buy an annuity)

ianpalmer2007

Yes - I know it could be seen as "risk taking" but I equally believe those of us due to retire in 2010/11 are faced with hanging on a little longer or taking annuities when our funds are at the bottom end of the market. I accept that is my risk - but I wondered if leaving £40k in NPI / Pearl was worth considering although most people seem to be saying (on forums) if you can get your fund out - get it out.

Ian

dunstonh

I have a research document on Pearl/NPI which is possibly one of the best I have ever seen. The researcher used flowing text and comparisons. So, much so that despite being written nearly 7 years ago, it sticks in my mind.

Couple of snippets

In railway vernacular, this marks the final chapter in these companies’ decline
from mainline express trains to being sold for scrap.

Whether or not clients should stay in these funds remains one driven by
individual considerations, the decision being a function of time to retirement, the
presence of GARs, lack of MVA guarantees, client’s attitude to risk, state of
health (if any protection benefits involved) and so forth. WP clients with some
years to go and no contractual incentive to stay put should, however, at least
consider their options.

---

With your fund size, you should also be considering the unsecured income option. Not saying its the right option but your fund is big enough for you to consider it. It may also help if you feel timing isnt right as it will allow you to remain invested whilst being able to take an income.

ianpalmer2007

Thanks for that - the unsecured income option frightens me (probably as I don't fully understand it!) so I think I will take a risk in the next year or two and pick a time to come out - take my annuity - and keep my fingers crossed!

dunstonh

the unsecured income option frightens me

Think of it as being on par as staying on medium/high risk basis with just a year to go

kidmugsy

" in a year or two - when the FTSE is at 6600 again": how on earth do you know?

ianpalmer2007

kidmugsy wrote: »

" in a year or two - when the FTSE is at 6600 again": how on earth do you know?

Clearly nobody knows that but that is my opinion :T

atush

ianpalmer2007 wrote: »

Clearly nobody knows that but that is my opinion :T

So you are a Bull and not a Bear. So as long as you are prepared to live with a 40K fund that could turn into a 30K fund, you should be fine. that would mean just losing your 25% lump sum in effect.

I generally tend to the Bull side in general, but have been known to cash out too. Sold half my gold recently. Not bearish on it, but taking more than 100% of original inv and will be happy to ride the rest of the way.