Savers seeking to keep early access to pension pots face 2023 deadline
Investors must take swift action to safeguard their pension rights the Financial Times warns. This is because the Government plans to increase the age when savers can access their pensions.
The Government says it could increase the so-called ‘normal pension age’ to 57 by 2028 to keep pace increasing life expectancy.
To help those who do not want to lose out, savers can keep their current pension age of 55. This can happen if they transfer their pots to schemes where the 55-pension age falls within the scheme’s rules.
This must happen before 2023. We will be making sure our clients have done everything they need to do before this.
Safe funds have become filled with risky investments
Funds considered to be ‘balanced’ or ‘safe’ have turned out to be riskier than many savers thought, reports The Telegraph.
Research by Tam Asset Management found that almost two-thirds of such funds hold more than 60% in shares, a third have more than 70% and some even hold 85%.
The firm also estimated a portfolio with 70% in stocks dropped by more than a quarter in the first three months of last year. This was during volatile markets amid the pandemic.
The whole “Balanced” fund misnomer rears its head whenever markets hit some turbulence. A “balanced” portfolio has historically been considered to consist of 60% in equities and 40% in stocks. However, this does not mean that a “balanced” fund will not fall in value. There is also the issue that managers in the “balanced” fund sector may try to increase the equity component of their fund to look better than their peers.
Ultimately you need to be sure that your portfolio is right for you. To do this you need to have a greater understanding of your needs and the makeup of your portfolio than terms such as “Balanced”. This is where financial advice can help.
How to teach your bored teenager about investing
The Financial Times writes about how teenagers are likely to have got questionable investment tips from a ‘finfluencer’ on social media.
The article covers some of what she plans to talk about with her child, giving an agenda other parents can easily follow. This covers cryptocurrency, sensible investing, and frugal living and financial independence.
Good investing can be tremendously boring. Therefore, ‘finfluencers’ promote much more speculative investments that offer lottery-like returns. What they don’t cover are the risks which can be even higher than playing the lottery.