On 24/02/2012 14:17, Dave Liquorice wrote:
On Fri, 24 Feb 2012 10:06:33 +0000, Nightjar wrote:

I would wholeheartedly agree. I started my first pension scheme at age
19, ...

I joined the company scheme when I had to at 21 not when I joined the
company at 18. I reckon those 3 years of missing contributions have
reduced the (small) pension by a few thousand pounds. I only
contributed for 14 years.

I was still at university, but, when I worked out what a state pension
would buy, thought it was worth starting a private pension scheme with
whatever I could afford at the time.

I would suggest putting a small proportion into higher risk investments.
Given a good enough spread, which your advisor should arrange, the gains
will outweigh the losses.

A "cautious" or "balanced" portfolio should do that. Ideally you
ought to take a test, forget the name, that asseses your aversion (or
not) to financial risk and then have a portfolio constructed over
several different types of investments and risks to match that
assesment.

It's also important to rebalance the holdings every year. Other wise
the proportion of the high risk / high return holdings may well mean
the overall protfolio shifts in risk, hopefully to higher risk which
you don't want.

This is where it is important to get an independent financial advisor to
match the investments to your aversion to risk. I would not dream of
rebalancing the holdings every year. I fully expect the high risk
investments to take a fairly heavy hit at the beginning and seeing that
in black and white (or red) every year might tempt me to get out of them
before the long term gains start to kick in.

Note: this is not an option for anyone who frightens easily or who does
not realise that you need to take a very long term view of pensions
investments.

Aye, pensions is really long term, yep have some stuff that might
produce 25%/annum but stick most of it in known and established funds
that just plod along at a steady few percent above the general bank
savings rates.

There is something to be said for not being able to get at your pension
fund, even in times of need.

I'm thinking that the OP is still very young and probably has some
large costs coming up in the next 10 years, house, family, etc. Using
say an ISA "pension" fund to put a deposit on house is just moving
the investment. ****ing it up against the wall is not such a good
idea...

There are other pension schemes that would allow that. My main pension
is from a small self-managed scheme, which allowed me (with the
statutory requirement of approval from a pension provider after Robert
Maxwell fell off his boat) to make loans and to buy property, as well as
making more conventional investments.

Colin Bignell