LGPS Prudential AVC Funds

Maria2512

Hi all,

Finding this site and the help/guidance/tips I have received has made it easier for me to navigate through the Pensions Minefield!

I have just over 2 years till I take retirement at 60, this could be just over 1 year as there is talk of redundancies in March 26.

I have SSAVC's which has been invested in the Prudential S3 UK Equity Pen for the last 8 years which is higher risk. I started investing £100 per month and gradually increased it to £1300 per month.

As I only have 1-2 years left, I think its time to move my investments to a 'safer' fund as I want to take the amount as a TFLS.

For context I have invested £67800 and the current value is £80k.I am happy with that and would like to 'lock in' any gains I have made.

Prudential have giving me 17 funds I could invest in - see below

BlackRock Aquila UK Equty Index
Prudential Dynamic Global Equity Passive
Prudential Dynamic Growth I
Prudential Dynamic Growth II
Prudential Dynamic Growth IV
Prudential Dynamic Growth V
Prudential Positive Impact
Prudential S3 All Stocks Corporate Bond Pen
Prudential S3 Cash Pen
Prudential S3 Discretionary Pen
Prudential S3 Fixed Interest Pen
Prudential S3 Index-Linked Pen
Prudential S3 International Equity Pen
Prudential S3 Long-Term Bond Pen
Prudential S3 Long-Term Gilt Passive Pen
Prudential S3 North American Equity Index Pen
Prudential S3 UK Equity Index Pen

Has anyone got any tips on good 'safe' fund options. What do I need to look for? Etc
Will I lose money if I invest it all in Cash? Do I mix and match in different funds? Or is it best to seek advice from an IFA?

I would appreciate any feedback.

Maria

Bobziz

If it were me then I'd switch everything into the S3 cash fund. This is a money market fund and you'd expect to gain ~ 3-4% per year over the next two years after charges. It's the lowest risk fund by far.

All the other funds have the potential to fall and with only 1-2 years before withdrawal, wouldn't have time to recover.

Maria2512

Thanks @bobziz yes, I think I will have to transfer into the cash fund but was thinking maybe do a 80%-20% split. My current fund S3 UK Equity is doing ok at the moment so it’s all about timing I suppose. 

Bobziz

As a guess I'd say that split will give you a return anywhere between £4k higher and £8k lower than a 100% cash fund.

That UK fund has averaged just under 6% a year over the last 10 years. In the last year it's returned just under 15%, so it's been an exceptional year.

My £4k figure assumes that the exceptional year is repeated over the next two years. My £8k figure assumes a ~50% drop as per the financial crisis from 2007-2009.