De-risking Pensions

Wrath_of_Kain

I am not too far from starting to think about retirement dates (c.5yrs) but having restless nights thinking about what might happen to my pension pot in the current geopolitical and economic context.

Wars, corruption, AI bubble, chaotic governments etc. so much instability and just have a gut feeling there is something horrible brewing.

Interested in peoples opinions if its worth de-risking my work pension (managed) and how to do it.

I was initially thinking having a look at the lowest risk rated product investments but not sure just how safe even the lowest risk offerings are e.g. bonds, cash etc.

Split my fund with 50% cash and bonds with the other 50% on usual shares ?

Thanks in advance

Moonwolf

What are you intending to do with your pension when you retire.

The biggest de-risk you can do is buy an annuity. If you are close to retirement you should be moving to low risk investments, bonds and cash before retirement. Government bonds very secure and if the UK government wasn’t in a position to pay its bond commitments there would be much bigger problems to worry about.

If you are planning to drawdown then you need to decide on your risk profile and have a balance of investments that meet that but remember, you are probably planning for 30 years so things will go up and down.

Sam_666

What kind of pension you have ?

Have you considered annuity?
If you want peace of mind, either see GP or IFA. Instability you describe, is what makes human race human.

dunstonh

I was initially thinking having a look at the lowest risk rated product investments but not sure just how safe even the lowest risk offerings are e.g. bonds, cash etc.

It's worth noting that the lowest, or what is generally classed as the lowest-risk, offerings have made nothing for the last seven years. And in one year, 2022 over 2023, they lost more than a typical stock market crash.

Interested in peoples opinions if its worth de-risking my work pension (managed) and how to do it.

It would help to know where you currently are on the risk scale. And what your objectives are. For example, if you're buying an annuity, then you want to be de-risking from about 10 to 15 years before. If you're going into drawdown, you may not need to de-risk at all. However, how you invest will likely be different if you're doing it properly.