Switching DC Funds

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
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shinytopshinytop Forumite
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Hi,

A bit of advice needed...
I was wondering about switching funds in my DC pension as I approach retirement. I’m currently in Lifestyle: Legal and General Global Equity 60:40 (70%) and Legal and General Over 15Y Gilts Index (30%). This is the default and the scheme currently assumes my retirement in 7-8 years. I’m planning on finishing in 9-12 months, maybe a little more. I have about £320k in these and am putting in as much as I can extra. I don’t need all the funds immediately at retirement but will use the TFLS to fund the first 18 months or so until our DB pensions kick in and draw a lot of the rest down until SP arrives in 2028. Should I be switching away from equities or choosing different equities? Putting some in cash? There is a small choice of L&G, Fidelity and Aberdeen funds in the DC scheme. Any thoughts/ideas? Or should I really be talking to an IFA rather than strangers on the internet as this is really quite a lot of money…

Replies

  • dunstonhdunstonh Forumite
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    I don’t need all the funds immediately at retirement but will use the TFLS to fund the first 18 months or so until our DB pensions kick in and draw a lot of the rest down until SP arrives in 2028.

    That ist almost certainly not be the best way to do it. Phased flexi-acess drawdown is likely to be better than flexi access drawdown.

    Your way will create higher long term tax.
    Should I be switching away from equities or choosing different equities?

    Your fund is not a great option and the stategy is not suited to drawdown. Plus, the pension you have probably cant do drawdown without being moved to one that can.
    Or should I really be talking to an IFA rather than strangers on the internet as this is really quite a lot of money…

    If you can DIY well then you can save money. if you DIY badly it can be costly. The method you proposed for drawing the money could be far more costly than an IFA.

    So, your choice is effectively DIY or IFA and what you feel comfortable with.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • shinytopshinytop Forumite
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    The method you proposed for drawing the money could be far more costly than an IFA.
    Well I'm still learning and hadn't got as far as Phased flexi-acess drawdown so thanks for the steer. I didn't even know what drawdown was a few weeks ago.
  • AlbermarleAlbermarle Forumite
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    Just to repeat one point already mentioned . Suggest you check first with L & G if the pension you are in supports drawdown. Some pension companies have not updated their systems/software to manage drawdown. Or they say they can but in reality it means still having to transfer you current pension to a new one with the same company.
    If they do not offer it all then you will have to transfer to a new provider.
  • shinytopshinytop Forumite
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    Suggest you check first with L & G if the pension you are in supports drawdown.

    Thanks. The pension is provided through Xafinity; L&G is just one of the fund choices (and my default one). I'll check whether they do drawdown; I don't think they do so. Their fund choice is quite limited so I'll almost certainly be transferring anyway.
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