Most of the current crop of workplace pension schemes will put you by default into a ‘life styling’ fund. This has nothing to do with your lifestyle, even assuming your employer, let alone your pension provider, has any idea what that might be; the mind boggles. No, it means that, as you approach whatever random retirement age has been allotted to you, the amount held in shares is reduced, the amount in ‘safer’ investments like government gilts increased, eventually to everything. It’s based on the now-long-outdated assumption that on that magic day, you’ll cash in your chips and buy an annuity; which very few now do or would, despite rising interest rates, be advised to do; and the assumption that gilts won’t plummet in value, which we now know, thanks to Liz and Kwasi, not to be the case. My advice pretty much every time is to switch to a ‘normal’ managed fund and not to cash in those chips. Retirement these days is rarely ‘all or nothing’ so take advice on the best way to fund it. At whatever age you choose.
“Advisers fearful of further compliance and regulation”
We know, of course we know, that regulation is, or at least should be a ‘good thing’. If those who need or should seek advice can be confident that they’ll be told the right thing, that someone has looked at those ’too good to be true’ investments before they’re allowed to take your money; or, in the case of a Woodford, while they’re raking it in to make sure it’s going where it’s supposed to.
