Pension Advice Sort

kidmugsy

I'd be tempted to live with the guaranteed 4% p.a. (which might prove pretty good for the next few years) while looking to do something different with the rest of the SL money. Also I'd hope to find something different at SW. Lastly I might hope to bung your proposed extra £100-£200 a month into a SIPP or ISA and invest it into Physical Gold and Physical Silver ETFs. Or even just ignore SIPPs and ISAs and buy Sovereigns or Britannias if you have somewhere secure to store them. I'm confident that not everyone will agree though.

xylophone

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jamesd

What sort of drop in value can you handle during a bad year without giving up hope and selling? A normal FTSE All Share index tracker will drop by 20% quite regularly and 40-50% every decade or two. But along the way the historical record for the last hundred years has been inflation plus about 5.2%, a total of around 9% a year. While I wouldn't actually suggest that you use that - I'd go very global instead - that's the sort of potential difference of investment growth that is available if you can handle the ups and downs.

With profits funds mask the ups and downs and many people like that, but there are costs to it. The big question for you to decide on is whether you want that steady 4% and whatever bonus might exist. An IFA like dunstonh might be able to give you a better idea of what to expect and how to invest but that's not going to be free, if only because the IFA has to make a profit as well as paying for lifelong insurance and a lot of other costs.

Depending on your risk tolerance I'm inclined to think that you may be comfortable keeping the with profits investment with the guarantee and putting new money into investments that have more ups and downs and no guarantee. That'll give you a mixture of certainty and growth potential.

What I don't know that matters greatly is what the potential value of the with profits scheme with guarantee and possible bonus is.

The large lump sum from the executive pension is of considerable potential value because it's money that you can invest flexibly inside a stocks and shares ISA when you retire. That can get you tax free income and also access to all of the capital if you need it.