Transferring a Pension

Tammy2

jamesd wrote: »

So, going back to your original question about risk and changing investments, is that fund suitable? It is of a type called "balanced managed" and these vary a bit but in general could go down by up to 30% in a bad year, while a fund using pure shares could go down by 40-45% in the same situation. On a risk scale it'd probably be rated medium or medium-high risk based on that potential drop range. For a pension those routine drops aren't a direct concern because it's long term investing but they can scare people who don't know that they are normal.

For people who plan to buy an annuity at the retirement age given, a drop just before that could be a big problem and result in a real loss of long term income, so that's where lifestyling comes in. Lifestyling reduces potential growth in the last few years in exchange for reducing the chance of a big drop just at the end. If you're flexible about when you retire or don't plan to buy an annuity or pay off a mortgage you don't really need lifestyling and in any case now you know about the funds you can just go in and change what you pick when you want to do that. So if you think you'll continue to pay attention I suggest that you turn off lifestyling.

If you can handle a bad year with 40-45% drops once or twice every ten years in the midst of general growth I suggest that you consider a global/international fund. It looks as though the Legal & General International Fund is of this type. However, it's performed less well than the alternative Legal & General Newton International Fund so I suggest that you pick that one out of these two pure international funds.

Neither of those has any substantial UK investments so you should also put 10-20% into one or more UK funds. Rather than making a suggestion I'll leave you to explore for a while.

Thank you jamesd, that's very helpful. I will look into it.

So grateful for all the help on this thread - thanks everyone. So glad I joined