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tune2001

Company Pension Blues

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My company pension has been ticking along nicely since I opened it about 3 years ago. My problem is this:

I can choose from 5 plans which split the fund across equity/fixed income. I've currently got a 75%/25% equity/bond mix. With indices at 'nosebleed levels' I thought about whacking it all into bonds BUT aren't bond prices falling? It looks like there's no way out of watching my fund fall over the next few years...

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My company pension has been ticking along nicely since I opened it about 3 years ago. My problem is this:

I can choose from 5 plans which split the fund across equity/fixed income. I've currently got a 75%/25% equity/bond mix. With indices at 'nosebleed levels' I thought about whacking it all into bonds BUT aren't bond prices falling? It looks like there's no way out of watching my fund fall over the next few years...

Can't you put it in cash?

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My company pension has been ticking along nicely since I opened it about 3 years ago. My problem is this:

I can choose from 5 plans which split the fund across equity/fixed income. I've currently got a 75%/25% equity/bond mix. With indices at 'nosebleed levels' I thought about whacking it all into bonds BUT aren't bond prices falling? It looks like there's no way out of watching my fund fall over the next few years...

An important thing to consider is how far away you are from retirement.

I assume you are in a money purchase (defined contribution) plan. The way most passive (sometimes called lifestyled) money purchase funds work is to gradually switch out of equities into cash and gilts as you approach retirement. This usually kicks in around 5-10 years before your target retirement date and protects you from a stock market crash. As a consequence though, it means you miss out on a stock market boom as well.

If you are in equities and you are currently contributing then think of all the extra cheap equities you'll pick up if the market falls!

NDL

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If you are in equities and you are currently contributing then think of all the extra cheap equities you'll pick up if the market falls!

NDL

Well - there's 40 years left til I retire! God knows what the world will be like then! I've just got so used to seeing all my investments do nothing but go up (wish I'd bought more gold!) that seeing them fall is going to depress me - fact of live I suppose!

Sadly and bizarrely - cash is not an option!

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Well - there's 40 years left til I retire! God knows what the world will be like then! I've just got so used to seeing all my investments do nothing but go up (wish I'd bought more gold!) that seeing them fall is going to depress me - fact of live I suppose!

Sadly and bizarrely - cash is not an option!

In the long term equities provide a much higher return than bonds or cash, there will be ups and downs along the way just as your pension provider will invest in super shares, dogs, overpay for bonds etc there will be winners and losers. Im not sure trying to micromanage a 40 year investment will be to significant, if you go into bonds when will you call the bottom of the stock market and go back into equities?

Can you maybe split the equity investments across countries ie. UK, Japan, EU maybe that would be a way of lowering the equity risk?

If you want to actively manage a pension plan its probably best setting up a SIPP and putting your own money in which you can claim tax back on, rather than getting your company pension admin to change investment strategy regularly(which most wont be too happy with). You could then maybe take a different strategy and use it to invest in lower risk assets than your company pension which will have to benefit of free money in the company contributions so could be more risky?

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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