Fund choices for SIPP

Jet123

Hi, I have recently opened a Sipp with Telegraph Investors and transferred a pension in cash from a previous employer (£160000), I am 61 and thinking of retirement in the next 2 years.
I now need to invest this money into funds but not take to much risk . What fund choices would be appropriate.

Thanks

J.

Joey_Soap

With all asset prices close to all time highs you need to be very clear what your attitude to risk is and what your objectives are. For example, if the market were to lose 30 or 40% in the next two to three years, would you still be happy investing in a fund? This is the ind of question that only you can answer.

OldMusicGuy

It depends on what other pensions and income you have and how you will use this money in retirement. Will you need to draw cash from the SIPP to cover short term costs before the state pension kicks in? Or is it more of a longer term investment that you want to grow that you will call on in later life? Or is it both? What SP will you get and when does that kick in?

There will be plenty of opinions from knowledgeable folks on here but unless you give us more information about your financial situation it's really hard to make suggestions.

AnotherJoe

OP, what are your plans when you retire. Will you use the money immediately and if so, how much of it?

Jet123

Hi thanks for your reply, I have other savings I can access before SP kicks in. My plan is to view the Sipp is more a longer term investment.

Linton

Jet123 wrote: »

Hi thanks for your reply, I have other savings I can access before SP kicks in. My plan is to view the Sipp is more a longer term investment.

Do you have other income to supplement SP or will you be relying on your SIPP at that point? If the latter how much will you need to drawdown annually?

If you have sufficient other income it could be sensible to keep the SIPP in longer term mainly equity investments with a cash buffer to cover any short term needs. From the SIPPs point of view nothing particular happens when you choose to stop working.

xylophone

Do you have a pension with your current employer?

Have you obtained a state pension statement?

https://www.gov.uk/check-state-pension

Had you considered consulting an IFA?

https://directory.moneyadviceservice.org.uk/en

pip895

Over the long term assuming a mainstream global portfolio the higher the risk taken the higher the likely eventual return

If you take the popular VLS series then the highest risk (most volatile) is VLS 100 which is 100% equity. VLS 20 (20% equity) is lower risk. My feeling is that many on here retiring using drawdown, or approaching retirement like yourself, pitch in at about the VLS 60 level so a bit more than 50% equity - not necessarily using that particular fund of course.

In current market conditions, if you want an above inflation return you have to take risks.

bostonerimus

Jet123 wrote: »

Hi, I have recently opened a Sipp with Telegraph Investors and transferred a pension in cash from a previous employer (£160000), I am 61 and thinking of retirement in the next 2 years.
I now need to invest this money into funds but not take to much risk . What fund choices would be appropriate.

Thanks

J.

First of all I'd like to chastise you for moving your money with out a definite plan.

Have you done a detailed budget so you know how much income you'll need to generate? To be able to give you sensible advice we need to know that, along with all your other investments, savings and pensions.

MallyGirl

To be fair, I was recently quoted around 12 weeks to transfer a pension into a SIPP - that would give plenty of planning time. In the end mine happened much quicker than that, and it was only a £6k pot, but I was still working on what to do with it when the transfer completed.

enthusiasticsaver

My advice would be global multi asset so well diversified. You can choose the level of risk by way of choosing the level of equities to bonds/fixed term deposits. There are lots around. Vanguard Lifestrategy funds are popular on here but Legal and General multi asset and Blackrock consensus are all similar. Look at the charges as well as the annual returns.

Where was it invested before and was there a reason you wanted to move it?

Trustnet, Morningstar and Monevator are all good places to read up on them.