"Safe" pension fund suggestions

ctdctd

Hi,

I'm 55 and have sufficient investments for my pensions including a SIPP.
I am happy with my current investments and risk.
I won't need to draw on these pension funds before I am 70.

Going forward, I won't be a tax payer so it makes sense to me to add £2880 to the SIPP each year to get the additional 20% tax credited by HMRC.

This £2880 PA would come out of my cash savings and I might need to get it back before I am 70.
I am currently getting about 2.1% average on cash with FSCS protection and either instant access or within a year.
I'd either want similar in a bomb proof fund or maybe an extra couple of percent for something with little risk.
Any suggestions for Gilts/Funds/Bonds to stick it in?

dunstonh

Any suggestions for Gilts/Funds/Bonds to stick it in?

Investing 100% into an asset class increases the risks.

It seems you are focusing too much on investment risk and not enough on shortfall risk and inflation risk. What is your problem with investment risk?

AnotherJoe

15 years at 2-3 % inflation could reduce your real spending ability by 40-50%.

Are you really happy with that ., because that would be the "no risk" option of choosing something that cannot go down due to market drops.

ctdctd

dunstonh wrote: »

Investing 100% into an asset class increases the risks.

It seems you are focusing too much on investment risk and not enough on shortfall risk and inflation risk. What is your problem with investment risk?

My existing pension funds are medium risk which is fine for me with 15 years to go.

I would like a low risk fund for the new subscriptions to at least keep pace with inflation. My cash has done this taking advantage of the higher rate, probably loss leader, accounts offered by banks etc.

ctdctd

AnotherJoe wrote: »

15 years at 2-3 % inflation could reduce your real spending ability by 40-50%.

Are you really happy with that ., because that would be the "no risk" option of choosing something that cannot go down due to market drops.

My cash keeps pace with inflation mainly - I would like similar low risk in a pension so I can take advantage of the tax refund.

AnotherJoe

It's very difficult to keep large sums of cash in a SIPP and get anything more than dismal interest. 2% out if question AFAIK.

Do you want to give some example of what you consider medium risk funds ? It's all relative

(When I told an adviser my low risk fund he commented that's what he advises for people who wanted a high risk fund :eek: )

ctdctd

Medium risk to me would be something like VLS 40.

dunstonh

Medium risk to me would be something like VLS 40.

That is more cautious than medium. So, that puts you in some degree of context.

I would like a low risk fund for the new subscriptions to at least keep pace with inflation.

Why are you segmenting your investments this way? Why not a balanced portfolio matching your risk profile on the whole pot?

ctdctd

dunstonh wrote: »

Why are you segmenting your investments this way? Why not a balanced portfolio matching your risk profile on the whole pot?

That's a good question!

I guess my mind is telling me to treat these additional subscriptions separate​ly as something I have already aimed to draw on before the existing pension fund.