Standard Life Annuity Targeting Pension Fund

baldhubridge

This is a question from a newbie! I am close to retirement and have a modest fund with Standard Life. Because it is a legacy plan it has to be transferred to a new one before I can access any money. Then you have to choose where to invest your funds. If you're not confident in doing it yourself SL gives recommendations for 'investment pathway options'. My preferred option is to take an annuity within the next five years (after taking my tax-free lump sum). Their recommended fund for this is the Standard Life Annuity Targeting Pension Fund, which has lost value by 26.3% over three years. If I go for this one, which seems to have levelled off, and it gradually turns around, will I be better off than choosing an alternative which is already on the up. I understand the risks but not the general principle involved in pension performance and SL didn't want to discuss it. Thanks so much. 

Hoenir

baldhubridge said:

Their recommended fund for this is the Standard Life Annuity Targeting Pension Fund, which has lost value by 26.3% over three years. If I go for this one, which seems to have levelled off,

The fund has achieved it's purpose. While the capital value has indeed fallen. Annuity rates have correspondingly risen. The fund will progressively recoup the sudden drop caused by the rapid rise in interest rates back to normal levels again. 

Albermarle

baldhubridge said:

This is a question from a newbie! I am close to retirement and have a modest fund with Standard Life. Because it is a legacy plan it has to be transferred to a new one before I can access any money. Then you have to choose where to invest your funds. If you're not confident in doing it yourself SL gives recommendations for 'investment pathway options'. My preferred option is to take an annuity within the next five years (after taking my tax-free lump sum). Their recommended fund for this is the Standard Life Annuity Targeting Pension Fund, which has lost value by 26.3% over three years. If I go for this one, which seems to have levelled off, and it gradually turns around, will I be better off than choosing an alternative which is already on the up. I understand the risks but not the general principle involved in pension performance and SL didn't want to discuss it. Thanks so much. 

The fund would have been mainly invested in supposedly low risk bonds and gilts + cash.

However bonds and gilts are affected by interest rates, so did very well when interest rates were near zero, and then as the rates increased there was a big negative correction. This was probably a once in a century crash of investments that are normally seen as low risk. As the interest rate outlook is now down , bonds/gilts have recovered a little and should be pretty stable as they normally are.