SIPP Mix

Gatser

What % of your pension fund is in the different classes of investment?

I am wondering if I am too cautious... with too much in cash deposits... with ridiculously LOW interest (OK Low Risk:j)

gadgetmind

It all depends on your investment timescale and (some would say) attitude to risk.

With 170 days to retirement, it's also important to decide whether you'll be using annuities or drawdown. If the formed, you need loads of bonds and cash, if the latter, then you can be more aggressive.

dunstonh

To answer that we would need to know your investment strategy and risk profile and capacity for loss and likely timescale involved.

Gatser

gadgetmind wrote: »

It all depends on your investment timescale and (some would say) attitude to risk.

With 170 days to retirement, it's also important to decide whether you'll be using annuities or drawdown. If the formed, you need loads of bonds and cash, if the latter, then you can be more aggressive.

Plan to utilise Drawdown and have around 70% Bond funds, 30% Cash. Perhaps I should have a wider mix?
Any suggestions please?

I do not want to suffer too much of a hit on capital value

Gatser

dunstonh wrote: »

To answer that we would need to know your investment strategy and risk profile and capacity for loss and likely timescale involved.

Strategy: Eggs into different baskets to spread risk

Capacity for loss: maybe up to 10% downturn in any one year

Timescale: Start Drawdown in 2014, over a 25 year period

thanks

gadgetmind

I suggest you invest £15 in a copy of Smarter Investing by Tim Hale. There are lots of charts showing various risk levels for different rates of drawdown from various portfolios.

Zero equities will cause you issues as that book will show.

mania112

Your Age and Pension Value (after 25% tfc, if that's what you're taking)?

gadgetmind

Gatser wrote: »

Capacity for loss: maybe up to 10% downturn in any one year

Demanding such low volatility will greatly reduce the amount you can draw per year, but I do understand that some people focus more on capital than income, and you do need to be comfortable.

mania112

10% isn't low, less than 5% is low. 10% either way is considered moderate.

dunstonh

Capacity for loss: maybe up to 10% downturn in any one year

That is very low risk. You would effectively have very little equity (probably no more than 20% and being heavy in cash, gilts and bonds). Are you sure you want to have that low level?

10% isn't low, less than 5% is low. 10% either way is considered moderate.

moderate is closer to 20-25%. UK equity is closer to 40-50%

Linton

Gatser wrote: »

Plan to utilise Drawdown and have around 70% Bond funds, 30% Cash. Perhaps I should have a wider mix?
Any suggestions please?

I do not want to suffer too much of a hit on capital value

I have been thinking about this topic as I plan to start flexible drawdown in the next year or so. The strategy I am thinking of adopting is:

1) Hold a wide range of different investments balanced according to when the money will be needed.

2) So, years 1-5 maximum income requirement in cash or low risk bonds, years 5-10 in higher risk bonds and dividend paying shares discounted by the expected return over 5 years, and years 10+ in growth biased equities, discounted by the expected return over 10 years. Remember that some of the money wont be needed for perhaps 20 years so one can reasonably in my view take a moderately high risk though well diversified investment approach.

3) Rebalance every year.

I fear your very cautious strategy may have difficulties with periods of high inflation which surely must happen during the next 30 years.