Company Pension Funds – the right choice?

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
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A few weeks ago I asked whether it was worthwhile for my 57 year old wife to join the company pension scheme, having just been employed by them. With an employee contribution of 3, 4 or 5% being matched by a company contribution of 5, 6 or 7%, the general consensus of those kind enough to reply was that it was, even with a short timescale of probably three years.

That decision made, even more important is which funds to invest in. The choice is limited: World Equity Index; UK Equity Index; Gilts and Cash from Legal and General who manage the scheme. Rebalancing only allowed once a year.

At her age, gilts and cash would be the conventional route. With interest rates arguably topping out, is this not the time to consider gilts? On the other hand it could be said that some equity exposure is essential, especially if drawdown is contemplated. Her additional pensions: 12k in a GAR and 65k currently in cash, of which 8k is protected rights.

Her solution is 20% World; 30% UK; 30% Gilts and 20% Cash. I’m not sure about 50% equity exposure with markets near their highs and growth maybe slowing. Any opinions?


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