Portfolio for SIPP Flexible Drawdown

middlepuss

One other thought, OP. Do you have ISAs?

Income from your SIPP will incur income tax. Income from an ISA won't. So, you could take 25% out of your pension pot tax free and, over 2 tax years, put it into an ISA. That 25% of your pot then earns income tax free. And you'd probably want to hold your highest yielding investments in the ISA.

robmatic

Linton wrote: »

Of course, but the point was about the risk. It would be nice if something around the middle of the table in long term performance was in the middle of the table when it came to susceptibility to catastrophic falls.

Well, yes, it would be nice if a fund outperformed the market when the market was heading down. It would also be nice if that same fund outperformed the market when it was heading up.

However, identifying such a fund is tricky and that is why some people prefer trackers.

fairleads

5-Star wrote: »

As I will be receiving a final salary pension and do not want pay 40% tax I will keep the drawdown to around £5k per annum for 6 years until my state pension kicks and thereafter only dip in if I need emergency funds.

Not withstanding that I currently have all my eggs in one basket I am a “cautious investor” and as I’m not looking to replace the funds that are taken out, I will be happy with a low risk,low cost portfolio that generated sufficient returns for the money remaining in the SIPP to keep pace with inflation. My thoughts are 50% in FTSE index tracker and 50% in a corporate bond tracker – does this approach seem sensible and what are the alternatives?

To draw 6.25% of the fund each year for 6 yrs and still hope the capital grows in line with inflation is quite a big ask for an experienced DIY investor even, let alone a novice.
If you go the IFA route the extra cost/fee structure will add to your woes. However, it might be possible to hit the target with the current portfolio. What income does it produce?

pcrosland

Hey guys,

Hope I'm not hijacking the thread! Just a quick question can you transfer a SIPP? I have one at Halifax and would like to move it to HSBC? Is this possible?

dunstonh

Just a quick question can you transfer a SIPP?

yes

I have one at Halifax and would like to move it to HSBC? Is this possible?

Halifax and HSBC offer SIPPs? Thats a new one on me. I cant see why given their target market. Even without looking it up, I would put money on the terms being poor.

Linton

robmatic wrote: »

Well, yes, it would be nice if a fund outperformed the market when the market was heading down. It would also be nice if that same fund outperformed the market when it was heading up.

However, identifying such a fund is tricky and that is why some people prefer trackers.

Some people would prefer to miss some of the potential gains if they were protected from the potential losses.

The point of my original post was that the sector most tracker users invest in, FTSE100 or All Share, has in the past 10+ years managed to achieve the returns of a safe fund with the volatility of a high risk one. Investing elsewhere, say the Far East or Small Companies or EM, whether in a tracker or not, would have had much the same high volatility but would also have provided the appropriate returns.

In the sectors listed almost every fund would have beaten a FTSE tracker.

The fact that a fund performs well against "the market" is an unhelpful criterion if the market you have chosen is a poor one.

gadgetmind

I mainly use a global tracker, with some extra holdings in the UK to reduce currency risk, and with an over-weight to small/mid cap, income, EM and Pacific.

I've then added bonds (both active and passive), infrastructure (ditto), property (ditto), and I then use 5% of the portfolio for what I euphemistically call "themes" but is really just me having some fun with fairly high risk things such as technology, biotech, and subordinated bank debt.

gadgetmind

For the OPs drawdown plans, he really needs at least £5k x 6 in cash and bonds, with the rest diversified across other assets. Each year, he can decide what to sell to fund the drawdown and use this as an opportunity to rebalance.

Pulling out 25% PCLS and investing in ISAs is a no brainer.

middlepuss

Linton wrote: »

The point of my original post was that the sector most tracker users invest in, FTSE100 or All Share, has in the past 10+ years managed to achieve the returns of a safe fund with the volatility of a high risk one.

I've seen many comments on this forum recently about the FTSE having not been a very good investment over the past 10 years, some implying it therefore is not a good place to invest.

I think the FTSE is a great place to invest because it has performed so poorly over the past 10 years. It now offers good value.

gadgetmind

middlepuss wrote: »

I think the FTSE is a great place to invest because it has performed so poorly over the past 10 years. It now offers good value.

There is still some value the FTSE 100 (and more so in mid/small cap) but I can't see a strong argument for any heavy over-weighting of UK equities given the wealth of other investment options.

I also don't buy the argument of "it's gone down so it must be good value" - yes, at times some territories/sectors are over-sold, and represent storming value, but often things are cheap for a reason.

If you want value, look to Japan: loads and loads of value in seriously under-priced equities. Then lookup "value trap" on google.