Stakeholder - Investment fund choice

Kazza242

I've been researching various stakeholder pension providers for a while now and have now chosen a provider.

I'm now not sure which investment funds to invest in and would be grateful for some info. I plan to put away £234 a month and at the moment am planning to retire in 35-40 years' time.

As I'm starting in my 20's I would like to invest for growth, therefore, I have chosen a 'moderate risk' Managed Fund. This fund invests in a spread of UK and overseas equities, fixed interest stocks, property and cash.

There is an option to start switching to Fixed Interest and Cash Funds, ten years before my chosen retirement age and then on each anniversary of that date. Is this a good idea? Is 10 years (before my retirement date) too early/late to start switching to lower risk investments? I am aware that as I near retirement, it is not a good idea to still be investing in higher-risk funds, as my finances could be seriously damaged just as I'm about to retire.

The Managed fund also has a different option to start switching to Index-Linked Gilt and Fixed Interest Funds, five years before my retirement date. Is this too late? Or is the Fixed Interest and Cash Fund (ten years before retirement date) a better option?

What do you think of the type of funds (UK and overseas equities, fixed interest stocks, property and cash) it invests into?

Thanks. Sorry to ask so many questions . I hope someone can help.

dunstonh

You dont invest in one fund/area. You take a spread of funds/areas.

Lifestyle funds vary across the providers. Some will start the move to lower risk investments 10 years before. Others will give you a choice of 3,5 or 10 years. If you are not a hands on person, then it is a good idea to do this.

Managed funds (as in balanced managed, cautious managed or just called "managed") tend to be very poor. They are often used by tied sales forces who cannot advise on funds and people just end up in them. There are a couple of exceptions (like there is in all areas) but on the whole I think its best to avoid them.

Generally, the idea is to get a spread of investment areas across UK, Europe, Far East, US with some in fixed interest and property. The percentages you put in each area will depend on your view of investment risk.

Kazza242

Thanks for replying to my post.

I am not very 'clued up' on the investment side of things, which is why I was looking at the managed fund. It looks as though it invests into a broad range of areas/funds - UK and overseas equities, fixed interest stocks, property and cash. To be honest I don't feel confident enough to take a hands-on approach with it. I wouldn't know what percentage to put into each area.

I'll do some more research, but it's likely that I will stick with the stakeholder pension I've chosen, as the charging structure seems quite reasonable. I also like the idea of switching to less risky investments as my retirement date approaches.

Thanks again.