In episode 57 of the Informed Choice Podcast, Martin answers a listener question about the best way to invest a defined contribution pension.
There’s also a roundup of the latest news from the world of personal finance and investing.
Oil producers’ group OPEC has said it expects oil prices to reach $80 a barrel by 2020.
There was a sharp fall in the number of property transactions in November, according to the latest figures from HM Revenue & Customs.
There’s a growing disparity between the rich and poor, according to the latest figures from the Office for National Statistics.
The Money Advice Service plans to cut its marketing budget in half next year, as a result of the Farnish Review of how it spends its money.
The average family will spend more than £800 on Christmas this year, with most of this money spent on food and drink.
The main topic for the podcast this week is a listener question emailed in by Michael, who asks:
I have an existing local government pension scheme, which is a final salary paid up pension from my service in local authorities, and also private sector defined benefit pension schemes which I consolidated in. I now work in the private sector where as defined benefit pension schemes don’t in the main exist for new members, I contribute to a defined contribution pension scheme.
Instead of a roughly 6 % and 18% contribution mix, from employee and employer respectively, into the LGPS – I now pay a 20% / 6% mix into my employer’s group defined contribution scheme with Scottish Widows, making use of salary sacrifice. My contributions are invested in a global equity index tracker fund, with the aim of trying to maintain my target of a two thirds income replacement at retirement. I’m in my late 40s and aim to retire at 67, to coincide with my new state pension age.
I have wondered if a different portfolio with a less risky approach might be more suitable – as I’m not sure I need to take this level of investment risk. I’m taking a 15 year view so thought this fairly aggressive investment approach would be OK.
My question is with part of my income in effect ‘secure’ from a deferred local government pension scheme and state pension, what are the factors that I should be considering in working out what my investment approach should be for the defined contribution element of my pension?
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