Sipp investment formula

AMcGimpsey

Dear All,

I am looking to consolidate 3 pensions into an offshore or UK SIPP scheme on the understanding I will have full control of my investment decisions and actions. However, I am constantly hitting brick walls and being told that my intentions are against the rules.

Initially I wanted to consolidate the 3 plans, convert the sterling value into Egyptian Pounds EGP on FOREX and then invest the balance in a Bank saving bond at 13.7%:T for minimum 5 years offered at my Bank here in Egypt. :beer:

I am so frustrated, really I don't understand why my investment formula is viewed as extreme:mad:. I have 8 years until I can access my SIPP pension but am happy to continue investing longer too depending on my circumstance at that time.

My question is: Is there an alternative route (loophole) I could take in order to achieve this objective? The EGP is currently 22le = 1 sterling right now which is unprecedented and I really want to take full advantage of this rate. I have lived in Egypt now for 10 years, never have I seen it at this level. Normally 10/12 le = 1 sterling. I have noooooo intentions to return to the UK, my life is here with my son and husband so, I would benefit converting my sterling into this currency financially and logically.

Any suggestions how I can go about this would really be appreciated.:money:

robber2

Before any one can give you suggestions the first thing you need to do is explain a bit more about your exisitng pensions, for example are they DB or DC? Whats the value of each one?

regards

Rob

AMcGimpsey

Thanks Rob for your reply. Sorry to appear ignorant but would you elaborate on the abbreviations DB/DC ? My combined pot is 70,000 sterling.

AnotherJoe

Defined Benefit = You pay in £X and get a pension of £Y.

Defined Contribution = You contribute £X per month and build up a lump sum of £Z. What you do with it after than is your concern

AnotherJoe

AMcGimpsey wrote: »

I am so frustrated, really I don't understand why my investment formula is viewed as extreme:mad:

And that is why there are protections against people with your level of financial knowledge doing this sort of thing.

AMcGimpsey

Thank you Another Joe. I get your point! Well said. :rotfl::o
However, now I have an understanding of what DC/DB means I'm still perplexed as to why I can't do what I feel suits my individual circumstances.:( All 3 pensions are DC and dormant, I do not contribute to them any longer as I am unable to do so via Egypt - UK as I'm paid in a typical local salary!!!!:mad:
I really don't think my formula investment plan is based specutively. The EGP rate of exchange is factual and my banks fixed Bond is an established product.
If I am unable to achieve this objective in this simple format, is there not an alternative direction to take with my SIPP that meets my needs?

AnotherJoe

AMcGimpsey wrote: »

Thank you Another Joe. I get your point! Well said. :rotfl::o
However, now I have an understanding of what DC/DB means I'm still perplexed as to why I can't do what I feel suits my individual circumstances.:( All 3 pensions are DC and dormant, I do not contribute to them any longer as I am unable to do so via Egypt - UK as I'm paid in a typical local salary!!!!:mad:
I really don't think my formula investment plan is based specutively. The EGP rate of exchange is factual and my banks fixed Bond is an established product.
If I am unable to achieve this objective in this simple format, is there not an alternative direction to take with my SIPP that meets my needs?

There are numerous examples where people thought they were being clever by investing overseas, and the issue is once you do that you lose all protection. Currency speculating, which is effectively what you want to do, falls into that area.

In your case you wish to invest in what seems to be a falling or perhaps failing currency, 13% interest may seem great but the only way that can be sustained is through inflation, because worldwide "real" investment rates are 1% or so.

So, you can expect your Egyptian pound to continue falling at 10+% a year because theres no other way that rate of interest is sustainable. You say 1 to 22 is "unprecedented" presumably in the belief that it will go back to its "normal" range but more likely is that next year or the year after it will be at an "unprecedented" 1 to 33. Indeed I'll make a prediction right now that it will be 13% worse than 22 a year from now, so closer to 1 to 25.

You can therefore achieve the same aim of 13% growth by putting your money in a "safe" currency that will appreciate relative to the Egyptian Pound. US Dollars might be a plan as Sterling looks dodgy what with Brexit.

So to answer your question, buy very low risk rated or even pure dollar cash type investments in your SIPP. In a year from now I'd expect them to be worth 13% more in Egyptian Pounds.