Is your pension fund over £1m?

You will be aware of Government legislation surrounding the Lifetime Allowance.

Whilst tax may be inevitable, the question is how can you increase your investment returns.  Many pension funds are managed with a combination of Bonds and Equities. There is much debate at present whether the 60/40 investment portfolio is dead. If this is the case, your expected returns will be impacted.  It means therefore the tax on your pension fund has also more of an impact.

In many situations, large pension funds do need a rethink in terms of asset allocation. Whilst some financial institutions question the risks of mixed portfolios, to the extent they are looking to other assets to help generate returns.  For example, some institutions and advisers may suggest increasing exposure to private equity. It’s not whether that is right or not for the pension member, (you), but often it’s certainly right for the provider.

Whilst your investment managers want to make you better returns, perhaps by offering alternative assets, they are also fearful of you going elsewhere…that would be disastrous for them.  As such, they want you to stay invested. Sometimes, you need a fresh perspective with new ideas.

Whatever the solution, it should be more right for you than your investment managers…after all, it’s your money, not theirs.