Confused, require advice.

Bazzh

I intend retiring at the end of this year in good health. I will have worked 42 months past retirement age of 65. My state pension has been deferred, so if I took the increased pension it would be in the region of £180.00 per week. My company pension has also been deferred for the same length of time, also giving me around the same amount, or 25% tax free and a smaller pension. It also increases annually at RPI or 5%.
I also have savings of £170,000 spread across cash isa's and fixed deposits. I do not have any debt, and my OH has pension income of around £16,000. I have approached a IFA, who has recommended me to take as much cash as possible from my pensions and combine it with my savings into a defensive portfolio of gilts,bonds and property.

ferox666

More expert people will be along soon, but I would avoid property if I was you at your age - certainly NOT low risk or "defensive" in my opinion...given the current state of the economy and the risk of another "bubble" due to Help to Buy etc. So I'd avoid property, low risk equities/shares could be better. All my opinion only..

Drp8713

At 65 you may not want your money tied up in property, or did you mean property funds?

Do you have children?

To be honest, by the time I get to 65 I would be spending it. Obivously leave the children a few quid, but if you have worked for it all your life now is the time to enjoy it.

Linton

ferox666 wrote: »

More expert people will be along soon, but I would avoid property if I was you at your age - certainly NOT low risk or "defensive" in my opinion...given the current state of the economy and the risk of another "bubble" due to Help to Buy etc. So I'd avoid property, low risk equities/shares could be better. All my opinion only..

"Property" in investment discussions normally means commercial property, typically accessed via funds providing a dividend. As I see it the advantage is the dividend. The disadvantage is that the value of property can vary wildly dependent on the state of the economy - in the bad times there are lots of empty office blocks. In the past property was seen as a good solid investment providing diversification against equities and bonds but that doesnt seem to be the case now.

Linton

Bazzh wrote: »

I intend retiring at the end of this year in good health. I will have worked 42 months past retirement age of 65. My state pension has been deferred, so if I took the increased pension it would be in the region of £180.00 per week. My company pension has also been deferred for the same length of time, also giving me around the same amount, or 25% tax free and a smaller pension. It also increases annually at RPI or 5%.
I also have savings of £170,000 spread across cash isa's and fixed deposits. I do not have any debt, and my OH has pension income of around £16,000. I have approached a IFA, who has recommended me to take as much cash as possible from my pensions and combine it with my savings into a defensive portfolio of gilts,bonds and property.

The overall recommendation seems reasonable to me if the various pensions are sufficient for you to live in a style you are happy with. However I would suggest the defensive portfolio includes some lower risk equity funds rather than property.

kidmugsy

If you took the lump sum, how much would it be, and how much annual income would you be giving up to get it? Often it's lousy value to give up an RPI-linked pension to get cash. If you find yourselves with surplus income above your normal expenditure you can give it away to children/grandchildren/whomever, and as long as you make the gifts regularly they are exempt from inheritance tax.

Bazzh

Sorry I got this wrong. After reading through the proposed portfolio again, there are no property investments, only gilts and bonds also a small amount of cash. My preferred option would be, not to take any cash from my state or private pension, rather a higher income. Then divert around 80% savings into the portfolio, leaving me enough in cash for a rainy day.Does this seem reasonable?

kidmugsy

Bazzh wrote: »

Sorry I got this wrong. After reading through the proposed portfolio again, there are no property investments, only gilts and bonds also a small amount of cash. My preferred option would be, not to take any cash from my state or private pension, rather a higher income. Then divert around 80% savings into the portfolio, leaving me enough in cash for a rainy day.Does this seem reasonable?

It depends on the sums involved. If they offer you a lump sum of twelve times the pension forgone, don't take it. If it's thirty times, do take it.

atush

I agree, I would not take any LS from the indexed pension as you seem to have enough cash savings. Take the higher income. Unless of course they are giving you 30:1 as above.