Investing pension funds

Caink01

I have several pensions from previous employers and I believe when I am 55 I can access the funds to change the use of the money in them. I was hoping to transfer the funds to an alternative investment method, even high-risk as the sums involved are not critical.

Can the various options available be explained please? I understand you cannot advise on any but I would like to make a bit more of an educated decision.

Clive_Woody

It might be worth having a call with Pension Wise - government backed service who offer free impartial advice.

dunstonh

Clive_Woody said:

It might be worth having a call with Pension Wise - government backed service who offer free impartial advice.

Correction:  They are not Government backed.  They are financed by the financial services industry by a levy on all regulated firms.    They also do not provide advice.    And provide generic guidance to the drawdown/annuity methods.   They do not get involved with investments.

Can the various options available be explained please? I understand you cannot advise on any but I would like to make a bit more of an educated decision.

There are about 30,000 conventional options with thousands of stupid level risk beyond that.

Everyone has their own risk profile.   One person's high risk is another person's low risk or vice versa.    So, context is needed.    Lack of knowledge effectively increases the risk of options as you are more prone to making mistakes or not understanding the risks being taken.      How much loss could you tolerate on the investment before you got cold feet?

NannaH

You don’t have to be 55 to change your investments.  Usually a pension scheme has an online portal where you can view your account and swap investments. 
If your current scheme is a decent one and has the flexibility you need,  you could think about transferring all your old ones into it (if they allow it,  most DC schemes do)  those funds would arrive as cash and you would choose investments according to your needs.
You could combine your old pensions into a Sipp and treat that differently to your current pension.  
Any 100% equity fund is classed as ‘high risk’.   Managed funds (like Fundsmith) are more expensive than trackers and don’t necessarily outperform them.

A globally diverse, low cost fund or two is a set and forget choice,  just leave it to hopefully grow till you need it.
Something like HSBC FTSE All World index or Fidelity Index World,  have a look on Morning star or Trustnet to see what the differences are - it’s important to understand.   I have both because they offer slightly different things - emerging markets in one,  only developed World in the other.
A few hours spent on those sites researching different indicies is well worth it. 

NannaH

I’ve just realised you may be talking about taking everything out at 55 to invest elsewhere - that would be a spectacularly bad idea,  you would pay a lot of tax for one thing.  You can have all sorts of investments within a Sipp - Investment trusts, REITS, ETFs etc.  

Clive_Woody

dunstonh said:

Clive_Woody said:

It might be worth having a call with Pension Wise - government backed service who offer free impartial advice.

Correction:  They are not Government backed.  They are financed by the financial services industry by a levy on all regulated firms.    They also do not provide advice.    And provide generic guidance to the drawdown/annuity methods.   They do not get involved with investments.

Can the various options available be explained please? I understand you cannot advise on any but I would like to make a bit more of an educated decision.

There are about 30,000 conventional options with thousands of stupid level risk beyond that.

Everyone has their own risk profile.   One person's high risk is another person's low risk or vice versa.    So, context is needed.    Lack of knowledge effectively increases the risk of options as you are more prone to making mistakes or not understanding the risks being taken.      How much loss could you tolerate on the investment before you got cold feet?

Apologies, I should have said guidance not advice. Thank you for your timely intervention.
 
"Pension Wise is a service from MoneyHelper, backed by government. We offer free, impartial guidance to over 50s. We’ll explain the options to take money from your pension pots”

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-wise

Linton

It would not be a good idea to transfer the money somewhere outside a pension. What you should be able to do is to transfer you old employer pensions to another pension with a much wider range of investments.

A SIPP from one of the mainstream platforms would be sensible. Some major names include HL, AJBell, Interactive Investors. Which one is best depends on how much you have to invest, what you want to invest in eg shares or funds, and how frequently you will be buying or selling.

Having set up a SIPP you simply ask the provider to transfer-in your old employers pensions. You can do this at any age.