Pension funds

charliexyz

I have a pension that the company I work for set up for me, I pay into it and so does my employer.

About a year ago I switched the fund that the pension is invested in, from a default choice (cannot remember the name), into something a little more risky (well, its called 'UK Opportunities') and this has hugely outperformed the default choice Ipreviously had.

Does anyone else switch funds now and then? I get the impression no, because most of my own colleagues do not tinker with their pension fund choice.

Relatively speaking, stocks and shares are quite high at the moment, and so I am planning to switch my fund into something less risky, less likely to rise, but also less likely to fall. Which leads to the reason of my post, I may wish to switch directly into a cash fund, which has almost no rise or fall save for the inflation.

This would turn out to be a bad choice should the markets rise significantly, as the value of my pension fund would only be increasing by the amount that myself and my employer pays.

If you have experiencing in switching funds, is switching in and out of cash something you have done? My pension provider has no problem with me doing this, except that I am limited to 20 changes per year(!).

lvader

charliexyz wrote: »

I have a pension that the company I work for set up for me, I pay into it and so does my employer.

About a year ago I switched the fund that the pension is invested in, from a default choice (cannot remember the name), into something a little more risky (well, its called 'UK Opportunities') and this has hugely outperformed the default choice Ipreviously had.

Does anyone else switch funds now and then? I get the impression no, because most of my own colleagues do not tinker with their pension fund choice.

Relatively speaking, stocks and shares are quite high at the moment, and so I am planning to switch my fund into something less risky, less likely to rise, but also less likely to fall. Which leads to the reason of my post, I may wish to switch directly into a cash fund, which has almost no rise or fall save for the inflation.

This would turn out to be a bad choice should the markets rise significantly, as the value of my pension fund would only be increasing by the amount that myself and my employer pays.

If you have experiencing in switching funds, is switching in and out of cash something you have done? My pension provider has no problem with me doing this, except that I am limited to 20 changes per year(!).

Be very careful, stocks and shares look highish but could easily go much higher, there is no where for cash related funds to go but down.

GhIFA

charliexyz wrote: »

I have a pension that the company I work for set up for me, I pay into it and so does my employer.

About a year ago I switched the fund that the pension is invested in, from a default choice (cannot remember the name), into something a little more risky (well, its called 'UK Opportunities') and this has hugely outperformed the default choice Ipreviously had.

Does anyone else switch funds now and then? I get the impression no, because most of my own colleagues do not tinker with their pension fund choice.

Relatively speaking, stocks and shares are quite high at the moment, and so I am planning to switch my fund into something less risky, less likely to rise, but also less likely to fall. Which leads to the reason of my post, I may wish to switch directly into a cash fund, which has almost no rise or fall save for the inflation.

This would turn out to be a bad choice should the markets rise significantly, as the value of my pension fund would only be increasing by the amount that myself and my employer pays.

If you have experiencing in switching funds, is switching in and out of cash something you have done? My pension provider has no problem with me doing this, except that I am limited to 20 changes per year(!).

A cash fund has no guarantee that it will keep pace with inflation, and at current interest rates is very unlikely to do so. Also bear in mind the plan charges - returns can be so low on cash funds at present that you may find after the charges are taken into account your fund value will go down.

As a short term measure it may not be bad if you think equity markets have peaked and you are devising a new strategy, but as a long term approach it is unlikely to be advisable.

Essentially you are trying to time the markets - there's no exact science to that and can cost you more than it returns you if you get it wrong - a properly constructed portfolio in line with your attitude to risk, and reviewed regularly to ensure it remains appropriate is more likely to serve you better.