Stakeholder pension help please.

annie1975_2

My OH has a stakeholder pension with the pru..It is frozen at the moment,since he was made redundant about 9 months ago.There is £20,000 in the pot and he has 10 years til he retires from work.
Since he stopped paying into it the pot has not altered much,hovered between £19,500 and £20,500.
What i would like to know is,would it be better left where it is,or could it do better elsewhere?
Also can someone explain what drawdown is.

Thanks in advance for any info.

dunstonh

Since he stopped paying into it the pot has not altered much,hovered between £19,500 and £20,500.

Not a surprise. The last 9 months havent really gone anywhere on the investment front.

What i would like to know is,would it be better left where it is,or could it do better elsewhere?

Impossible to answer on limited info. For example you havent mentioned the investments yet are asking if there are better than what you have. If you went into similar investments with another provider then you would likely get similar returns. There may scope to improve potential but it could equally increase the volatility and that may not be a good thing for you.

Also can someone explain what drawdown is.

Something you worry about when you get to retirement. As it is 10 years away I wouldnt worry about it now as almost certainly the rules will be different by the time he gets there.

annie1975_2

Thank you very much dunstonh..It is invested in black rock aquila and global equity index.(50/50)

dunstonh

annie1975 wrote: »

Thank you very much dunstonh..It is invested in black rock aquila and global equity index.(50/50)

That is in index tracker. Cheap but benchmark performance. Consistently mid table for discrete performance. Ideal for the inactive investor. Higher risk and maybe a view on lowering the risk could be in order given that there are just 10 years left. Not all in one go but a gradual decline over a period. (the fund has 50% loss potential and less time until retirement means less time to recover)

atush

And this is where drawdown comes in. In the past, everyone reduced exposure to equities in the run up to retirement. Because everyone had to buy annuities.

But now they don't, you now have the option to instead keep your pot invested and draw an income with it. With this in mind, we are not reducing our equity exposure. But we do have bonds/gilts in our pension pots so we do have exposure there to these less volatile assets. But I am thinking of transferring the pension that is mainly in gilts/bonds so we can reduce the gilt exposure (can't where it is due to the scheme rules of this past employer).