Advice on Drawdown Pension

QrizB

chrisrsmith said:

Thrugelmir said:

My concern would be that you are worried by a 3% fall. All investment products are plastered with warnings that the value of investments can fall as well as rise. Investing is long term activity for good reason (Though a combination of factors creating the longest bull market in history seems to created an air of complancency amongst many investors).  If you cannot afford to suffer the potential volatility then time for a rethink of your strategy. 

What a helpful person. First one I've come across on such a useful forum.

There are lots of helpful people here, Thrugelmir among them.

If you just wanted people to make reassuring noises, you're in the wrong place.

TheMilkmansDad

So, if you get advise to "jump now" - what exactly do you plan on doing with it?  Nobody knows what will happen to cause changes in returns (positive or negative) in the next 6 months/years, we can only guess/hypothesis. But if you think you can do better, then by all means go for it and we wish you good luck.

Looking at short term trends (be it 6 months or 5 years) for a long term scenario isn't that helpful.

dunstonh

chrisrsmith said:

Thrugelmir said:

My concern would be that you are worried by a 3% fall. All investment products are plastered with warnings that the value of investments can fall as well as rise. Investing is long term activity for good reason (Though a combination of factors creating the longest bull market in history seems to created an air of complancency amongst many investors).  If you cannot afford to suffer the potential volatility then time for a rethink of your strategy. 

What a helpful person. First one I've come across on such a useful forum.
I'd be concerned about your attitude rather than my legitimate question. Poor chap🤔.

Thrugelmir is not wrong.  3% is tiny.   We had around a 10% fall over the last 5 months.   A crash is defined as over 20%.  There have been three market falls over 35% in the last 25 years.

With the fund you have chosen, it is highly unlikely you would suffer those scale of losses.  However, you are not going to get much on the upside as most of the things that caused cautious funds to outperform over the last 13 years begin to unwind and go the opposite way.

Kim1965

Chris, you mention savings buy to let and a db pension. So at 60, you have 7 yrs to state pension (is it full? ), what exactly do you need the dc pot to do? When can you take the db pension? 

chrisrsmith

Kim1965 said:

Chris, you mention savings buy to let and a db pension. So at 60, you have 7 yrs to state pension (is it full? ), what exactly do you need the dc pot to do? When can you take the db pension? 

Hi Kim, 
Yes my state pension is full. I would like the DC not to 'lose' and keep going down in value but as I stated at the start of this thread, I also would like to minimise the amount of tax that I become liable for (an aspect of my post that several on this thread ignored), OBVIOUSLY rates go up and down but one has to look at the overall timescales of living, pension start, tax etc etc 
I can take the dB pension now if I chose.
Thanks

Chris

Keep_pedalling

chrisrsmith said:

Kim1965 said:

Chris, you mention savings buy to let and a db pension. So at 60, you have 7 yrs to state pension (is it full? ), what exactly do you need the dc pot to do? When can you take the db pension? 

Hi Kim, 
Yes my state pension is full. I would like the DC not to 'lose' and keep going down in value but as I stated at the start of this thread, I also would like to minimise the amount of tax that I become liable for (an aspect of my post that several on this thread ignored), OBVIOUSLY rates go up and down but one has to look at the overall timescales of living, pension start, tax etc etc 
I can take the dB pension now if I chose.
Thanks

Chris

if your DB pension + your rental income + your state pension are enough for you to live comfortable, then rather than worrying about the long term performance of you drawdown pension, you could simply use it to defer taking you DB pension, to avoid reducing annual payments for taking it early, or to use it as a stop gap before getting your SP. 

Albermarle

I also would like to minimise the amount of tax that I become liable for (an aspect of my post that several on this thread ignored)

As far as I can see the tax situation is quite simple for you to work out . Pensions are taxed in a very similar way to employment income .
You will have the personal allowance each tax year , currently £12570 and any taxable income above that , you will pay tax on .
25% of the DC pension is tax free and 75% taxable 
The DB pension will have a tax free lump sum initially and the regular pension income is taxable . It might be possible to forego the tax free lump sum for a higher pension, if you want to .
The state pension is taxable.
Profit from rental income is taxable.

The only thing you can do is to make sure you fully utilise the £12570 personal allowance each year . For the DC pension you may be able to not take the 25% tax free in one go, and spread it out over a few years which may help. If you can do this depends on the flexibility of the pension provider.