Pension Advice

Neato

Hi,

For a bit of background - I posted here a while back looking for advice on how much I should pay into my pension. I received some top notch advice (Thanks Lokolo & hugheskevi) to get the most out of employer's matching scheme.

I've now upped my contributions to 5%, so I get 5% (maximum) 5% matched. My situation is similar, although I've brought down my amount of debt by about half. For the next year I'll be sticking to paying this much in as it's what I can afford.

Now I'm after advice on something I think is slightly more technical. I've read the guides from Martin, but it doesn't seem to cover this.

I am currently in a GPP and I'm on a set plan where my money is 100% invested in SW Consensus Fund (http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=SWCMP&univ=P) up until 6 years before I retire.

Then over those 6 years it is phased from Consensus to SW Pension Protector fund (http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=S9F19&univ=P) and SW Cash fund (http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=SWPCSO&univ=P), until I retire.

I've been given the option to switch to a slightly more complex plan

60% into SW SSgA 50:50 Global Equity Index Pension Fund
(http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=TIF57&univ=P)
20% into SW SSgA Non Gilts Sterling Bond All
(http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=BFFZ3&univ=P)
20% into SSgA Index Linked Gilts Over 5 Years Index
(http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=GEMPOI&univ=P) up until 10 years before I retire

Which phases into
37.5% SW SSgA UK Conventional Gilts Over 15 Years Index
(http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=BGFB3&univ=P)
37.5% SW SSgA Index Linked Gilts Over 5 Years Index
(http://www.trustnet.com/Factsheets/Factsheet.aspx?fundCode=BGFA3&univ=P)
25% SW Cash Fund

I honestly haven't a clue which one is best for me, or where to even start to look.
Does anyone have any advice on which option might be better? Or how I can assess which one is best for me?

Thanks in advance

kidmugsy

Are you anywhere near those final six years? If not, then in your shoes I might just opt for whatever is cheapest at the moment, and see what's on offer later on.

Neato

Noo, I'm 23. They're both the same price for management as far as I'm aware.

EDIT: The one I'm currently on is the current default for my company and the other will be the new default. I'm not sure if I'll be able to go back to the old one if I switch (If that makes a difference)

jamesd

The new one looks like a bad idea at the moment. Buying prices for bonds and gilts are currently quite high, in a bit of a bubble. And you're really way too young to have so much in them anyway.

Even the consensus fund is probably too cautious for your age.

Neato

I don't really have a choice, I can only go with on of those two options, regardless of my age. I'll leave it in the consensus for this year then, thanks.

atush

So, if you save outside a pension once your debt is paid off- I wold look at investing (after you have a cash emergency fund) into some higher risk funds as at your age you have many years to go.

Neato

Will do, thanks for the advice.