Moving Private Pension to a Drawdown

akh43

I have a pension from when I opted out in the late 80's for a few years of approx £25k which I am currently deciding what to do with as not happy where it is with Aegon as the amount just seems to be going down over past few years and the forecasts not very good if I leave where it is. I retire next month and don't really need the money now I was only taking it as not happy where it is. I would probably have just put in a fixed rate ISA which would not have really done much with the money

On reading some of the threads on this forum I am sure that is now not my best option and one suggestion from a colleague was rather than to take as lump sum to look at income drawdown to see if it a better option or move the money elsewhere. The more I look into this option the more confused as to the different options/companies and whether I need an IFA to deal with this or whether I can do myself, but as I have no experience whatsover with investing I am finding it all scary.

Part of my problem is I have no experience in stocks & shares and the thought I may lose money is concerning. All my savings are in various length fixed rate ISA's or regular monthly savings getting 5%, but only £2k, and the rest in Santander 123 getting 1.5%.

I had a meeting with an IFA through work last year who tried to get me to move approx £20k into stocks & shares ISA but I didn't do partly due to his costs and the thought of losing money if shares didnt do well. I am more comfortable with a small increase than risk even though I know it doesn't make financial sense.

Any suggestions on best options and how I can get past this fear of investing and learn a bit more about this would be appreciated.

dunstonh

am currently deciding what to do with as not happy where it is with Aegon as the amount just seems to be going down over past few years

That would be highly unusual. Often when people say something like this, it is not normally the case but it is something that is being misread.

For example, markets fell between October and December but had been rising in the years previous. So, a fall over 3 months you would expect. But over multiple years, no.

and the forecasts not very good if I leave where it is.

They are not forecasts. They are projections. Projections using artificial assumptions. A number of which are questionable but required to be used by the regulator. Those assumptions have been using lower figures in recent years. Perhaps you are mixing up artificial figures with the real figures?

I would probably have just put in a fixed rate ISA which would not have really done much with the money

That would be a bad move. The taxpayers will thank you but it is just not something you should be doing.

Any suggestions on best options and how I can get past this fear of investing and learn a bit more about this would be appreciated.

Knowledge and understanding. Make a bit of an effort to lean and then the head will be more in control than the heart. Remember that every option has risks. Including cash savings. Cash savings has shortfall risk and inflation risk. For longer term money, it can actually be higher risk to have cash than a sensible investment spread. And remember risk is not on/off. It is a sliding scale. You dont have to jump from risk 1 to risk 10. There is a lot in between.

TBC15

segovia wrote: »

That sounds reasonable, what did you transfer it to?

Fundsmith with AJ Bell.

segovia

TBC15 wrote: »

Fundsmith with AJ Bell.

AJ bell seems to come out favorably when looking at various reviews and recommendations. I am not at that stage yet but its something to consider. I'll be starting another SIPP thread when I get to that stage. (probably been done before)

AnotherJoe

segovia wrote: »

I'll be doing my research, but cash and low risk seem a likely option.

"I refer the honourable member to my previous answer" eg judging by your previous posts you do need an IFA or you'll likely lose money via too cautious strategies.normally IFAs would err on ten side if caution but I suspect in your case they would guide you to a higher level of if risk.

segovia

AnotherJoe wrote: »

"I refer the honourable member to my previous answer" eg judging by your previous posts you do need an IFA or you'll likely lose money via too cautious strategies.normally IFAs would err on ten side if caution but I suspect in your case they would guide you to a higher level of if risk.

That would not be a long term option, based on what I have learned so far transferring our current pots into a SIPP is probably done sooner rather than later. If it's sooner then initially I would be looking at low to medium risk while I get used to the platform and the various costs associated with each transaction. I make regular monthly payments into my current plan of £750.00PM which is subject to a spread. My intention would be to start a SIPP with the £750.00PM which at least covers the cost of the current spread, that would be a step in the right direction I think.

barnstar2077

If you are determined to get started you could just drop everything into a vanguard life strategy fund while you decide what you want to do. The vls 60 / 40 might be a good starting point.

segovia

barnstar2077 wrote: »

If you are determined to get started you could just drop everything into a vanguard life strategy fund while you decide what you want to do. The vls 60 / 40 might be a good starting point.

I am assuming that fund is available through most SIPP providers, correct?

J

AnotherJoe

segovia wrote: »

I am assuming that fund is available through most SIPP providers, correct?

J

Yes but the Law Of Sod says it wont be for the one you choose, so do double check.