Stakeholder Pension Query

kidmugsy

sham63 wrote: »

Not really - just following the advice on the Aviva website which indicates this is a sensible move to reduce risk?

Bond yields are at historic lows at the moment. That leaves bonds exposed to a risk of a loss of capital value if yields go up (corresponding to interest rates rising). Nobody knows when this will happen: people have been predicting it for years and it hasn't happened yet. But if you own individual gilts until maturity it doesn't matter: you get back the capital originally promised, whatever interest rates do.

sham63 wrote: »

Seems very straightforward to apply - lowish fees - uncomplicated - been happy with my dealings with Aviva over the years. Seems cheaper than the rivals (Scottish Widows, L&G etc)

Fair enough. One reason I might opt for a SIPP instead if I were in your shoes is the ability to invest in Gilts, rather than being restricted to funds of gilts or other bonds. Such funds don't have the feature of protecting your capital. For "other bonds" you've realistically little choice but to use a fund, because you'd need the diversification over lots of companies.

Mind you, there's nothing to stop you using Aviva for a bond fund and a SIPP for Gilts.