Better option than money market funds?

SVaz

For a pot that will be used in 3-4 years time, for around 4 years, so needs to be ‘safe’ . I know very little about Gilts but wonder if I can get a better return ? 

I’m looking to retire at 63 in 2028 and have 2 Sipps ( DB starts this year).  

I have 30k in Royal London STMM fund in Sipp 1,  earmarked for UFPLS use when I retire ( I’m contributing £125 monthly too) the rest of the £100k Sipp is in a mix of Fidelity index World,  VLS 80 and Fundsmith for long term growth. 

 Sipp 2 will be utilised at 67 and is in equities but I will probably start moving £20k gradually into the safe zone fairly soon to take tax free cash at 67. 

AlanP_2

You might get a better return, possibly even could or would get a better return but is it worth the hassle if , as you say, you know very little about gilts?

I'm similar and have avoided going down that rabbit hole but we do have access to good defined benefit pensions.

There are various threads on here and on the Savings & Investing forum about building gilt ladders which would give you pointers to further research, places to buy etc.

Secret2ndAccount

Gilts would provide you with a return that closely matches inflation. That removes risk, but right now it also harms your return. Money market funds are currently returning more than 4%. Inflation is around 2.6%. So, in the short term you are better off where you are. If interest rates were to drop, and inflation was to rise, gits would provide you with the knowledge that you would always retain your spending power. If, as you suggest, all the money is to be used in 4 yrs, you are likely to be just fine where you are.
You say the pot will be 'used' in 4 yrs. Are you planning to buy an annuity? Or are you saying you will draw your 1st payment in 4 yrs, but the pot has to last for decades? If the pot needs to be sustainable it's not ideal to sit in MMF forever.

SVaz

Only £40k or so of Sipp 1 will be used within the first 4 years between age 63-67 at £10k a year, that’s the STMM ‘pot’,  looks like the best option is to stick with it. 

I did state that the rest of the Sipp is invested for the long term - at SP age I’ll only take 2% ish of my Sipps yearly as income, which will be covered by dividends.   

Storcko14

I think you're probably in a good place.  I had a similar debate with myself last year and concluded that for now I will keep the bridge funds in STMM rather than build a collapsing ILG ladder.  My bridge to SP is 8 years from this summer so I'll be keeping a close eye on things at the same time as doing more homework on FI in all forms.  I also have the option to work longer and freelance rates in my line have tended to exceed inflation so it's a plan B.