Asset allocation in a dormant pension

tintin00

I have been contributing substantially to a SIPP and workplace DC pension for the last 10 years and built up a pot of near 200k.


I am now taking a new job with a DB pension and therefore am not planning to make any more substantial contributions to my old pensions (maybe the odd contribution for 40% tax relief) . I plan to use these funds to bridge the gap between early retirement (if I decide to go) and when my DB scheme starts to pay out.


I have been 100% equity for ever, but now think that something a bit more conservative would be better as I may be calling on these funds when I am 55, and will not longer have dollar cost averaging due to substantially lower contributions.


Any thoughts on asset allocation with these objectives in mind?

Lokolo

You haven't said how old you are. If you are 30, then I wouldn't be going away from 100% equities any time soon. If you are 50, then I would have already started to reduce the allocation.

dunstonh

Neither dollar or dormant apply here.

Any thoughts on asset allocation with these objectives in mind?

What model do you plan to follow? What risk level are you looking at?

[Deleted User]

Need to consider all your assets together. DB pension = fixed income. State pension = ditto. If I were you, I would still put the DC pot in stocks and make the retirement date flexible. One could retire after 55 if the target age is hit during a bear market. If you are really set on a fixed date and if you are 54 today then it’s different. Keep in mind that bonds are riskier than stocks in the long term.

tintin00

Thanks for the input. 37 years old and my DC pot has set me up to retire at 55 ish if I so wish and if investment performance is good.


Risk tolerance has always been quite high as I have and expect to continue to have the earning power to top up should investments not perform.

dunstonh

When you are building an asset allocation model, you need to know what modelling method you are going to use. What sectors are you including, is the allocation fluid or static, what volatility target range or is it just random hit and hope.

Sector/asset allocation models are for more experienced investors. Are you experienced and knowledgeable enough to build such a model for yourself or would a multi-asset fund be better for you? (a fund that does it all within itself. Usually a bit more expensive but better than making a pigs ear of it with random selections)