Pension Transfer Lump Sum Drip Feed or All In One

BathMoney

Have just transferred my pension over to my new SIPP provider, its arrived as cash.

Intending on investing it all into Vanguard LifeStrategy 60% Equity Fund A Acc.

Is it a good idea to drip feed invest, or am I better off just doing this all in one go?

dunstonh

Is it a good idea to drip feed invest, or am I better off just doing this all in one go?

Will let you know at the end of the phased period as to which option was best.

Statistically, investing on day one provides the highest return in the majority of cases. Nobody can know without hindsight. So, on that basis, day one investing is likely to be the better option but it may not be.

cfw1994

dunstonh wrote: »

Will let you know at the end of the phased period as to which option was best.

Statistically, investing on day one provides the highest return in the majority of cases. Nobody can know without hindsight. So, on that basis, day one investing is likely to be the better option but it may not be.

I think the D has it right.....but *personally* I would prefer to drip it in over a few months. I know: no logic to my thinking!!

greenglide

Presumably the money was disinvested in the old scheme before the transfer?


If you were happy for this as a lump sum why are you questioning the re-investment? It is effectively the same thing.

tacpot12

In the same situation as yourself, I invested the entire transferred amount immediately on the basis that even if the value of the investments went down, I would still be receiving the income from them, and there was as much chance of the investments going up as down.

bowlhead99

BathMoney wrote: »

Have just transferred my pension over to my new SIPP provider, its arrived as cash.

Intending on investing it all into Vanguard LifeStrategy 60% Equity Fund A Acc.

Is it a good idea to drip feed invest, or am I better off just doing this all in one go?

- You have a pension fund and want it to grow

- You had your money invested with the old pension provider

- In the days and weeks and years before the old pension provider was asked to transfer the assets to your new provider, the money was not in cash, but was all in investments. You were perfectly happy for all the money to be invested in an investment fund, as it had been since you or your employer had first made the original contributions.

- Then one day the pension provider cashes out the investments so that he can get the money over to your new platform and cash is the only way he's able to do it. It's annoying, but it means your money will be out of the market for a certain number of days until you can reinvest it on the new platform.

- Presumably you didn't ever intend for your pension fund to take an enforced break from being invested for your future. The break to cash temporarily is just because that's the only way you can change provider. Your goal should be to get the money invested again ASAP, because you are not going to grow your money for retirement by having it sit in a cash account earning zero interest.

- You have decided that VLS60 is the best way to grow your money for your retirement at an acceptable level of risk and volatility, so that's what you fully intend to put it back into.

BUT

Now you've had some bright idea that maybe your pension money should not be fully invested, even though up until a couple of weeks ago you were perfectly happy with it being invested? You think that now as it's been moved to cash temporarily to perform the cash transfer process, you might like to keep it there... keep most of your retirement fund languishing in cash with zero returns instead of being invested in investment funds, and only gradually start to buy investment funds again, until you eventually get it all properly invested again at some point in the future .

That sounds ridiculous.

You are accidentally in cash as a consequence of the transfer process. You should fix that unfortunate accident by investing the money again into your target allocation, just like it was properly invested with the old provider until recently. Anything else is silly.

Unless of course you know something about the short term direction of markets and honestly believe that if you slowly drip drip drip your pension money back into pension funds where they belong (rather than in cash where they don't belong), you will become able to buy the fund units at a lower average price due to an impending market fall.

You might believe that, and if so, fair enough. We can't prove that you're wrong, except as Dunstonh says, with hindsight But what are you basing it on? If you are just generally nervous that the investments will go down from time to time - yes they will go up and down from time to time, until you retire. As you know this, you decided to use VLS60 instead of VLS100. To now choose some weird split between VLS60 and cash for a while, doesn't make a lot of sense.

Albermarle

The logic of the above argument can not be faulted . The only thing we don't know is what the money was invested in before. Did the funds have the same/similar risk profile as VLS 60?
If they had a higher risk profile then there is clearly no logic in hesitating to invest all the cash straightaway. If VLS60 represents a higher risk profile than before , there could be some logic in investing over a period of time , although would be more logical to go for a less risky fund ( VLS 40 as an example)

wjr4

Also, it could have been a DB transfer.

AnotherJoe

Unlikely these days, plus the OP didn't start with a whinge about what a rip off the process was

Marcon

wjr4 wrote: »

Also, it could have been a DB transfer.

Doubt it. See https://forums.moneysavingexpert.com/showthread.php?t=5858642

BathMoney

bowlhead99 wrote: »

Now you've had some bright idea that maybe your pension money should not be fully invested, even though up until a couple of weeks ago you were perfectly happy with it being invested? You think that now as it's been moved to cash temporarily to perform the cash transfer process, you might like to keep it there... keep most of your retirement fund languishing in cash with zero returns instead of being invested in investment funds, and only gradually start to buy investment funds again, until you eventually get it all properly invested again at some point in the future .

That sounds ridiculous.

Got it thanks for your help. Been out of action due to illness for a while will sort this today. ;-)