Foreign Perspectives

Archive for March, 2015

Up until last year, the clear answer was with an increasing proportion of bonds as you approached retirement. However, that advice assumed that you would be buying an annuity on retirement therefore the rising proportion of bonds was aimed at stabilising your pension fund as you got closer to the point of purchasing the annuity.

All that changed last March when the chancellor announced that you would no longer be required to buy an annuity and could continue to manage your pension fund as you saw fit.

But, what does that mean in practice? Well, you don’t have the cliff-edge of an annuity purchase therefore you can carry on running the fund as you would have done ten or twenty years earlier. This means, that you can carry on largely in equities and, in principle, should let you have a rising income over the years that you are in retirement. On a related note, since the fund will go to your dependents, there isn’t the push to spend it all as there would otherwise have been and, of course, you wouldn’t want to run out of money either.

What you can do depends a lot on your circumstances and temperament. For example, if you’ve got the average pension fund of around £30,000 then you’re quite limited. That’s not really enough to allow you to take many risks and probably only really enough to act as a top-up to your old age pension which, in practical terms, means that you might well be best with an annuity. Move up to £300,000 (which a surprisingly large number of people will have) and it’s a whole different ball-game. For a start, that’s well above the minimum that a range of investment managers will take you on and it’s enough to allow you to move more into equities i.e. to take on a bit of risk.

What’s key though is to know what your attitude to investment risk is. Could you sleep at night if your pension fund dropped 30% for instance? Could you convince yourself that it wouldn’t matter if it did? (and it doesn’t – it’s the income that matters on a pension fund, not the capital value)

I got a surprising email from Queen’s last week to say that I’d an unconditional offer for the masters course.

I say surprising, as I was still waiting for the Open University to produce the references which, supposedly, were essential. Moreover, I hadn’t weighed in with an official transcript for any of my degrees which I also thought was essential.

The only problem with this is that unless the offer of redundancy comes through for the first wave, I won’t be able to do it.

Campbell runs quite a series of social events at the college aimed at the parents and former pupils.

They’ve a series of parent/teacher prayer meetings through the year in addition to various family services in the Great Hall. I’d sort-of thought of it as just a school hall but it appears that it counts as a church. In the last family service they had a christening and it seems that they do weddings as well.

Courtesy of the large choir and orchestra, they stage a number of productions during the year. You might be thinking “oh, school production” but in fact the musical event last week was thoroughly professional. In keeping with the spirit of the school, everything was handled by the pupils. Quite surprising to me were the two comperes introducing the show. To be honest, I’d thought that these were the guys who’d opted out of performing and then about 10 minutes into the show they stepped to the side to be the leads in one of a series of numbers that cropped up in the course of the show.

An interesting contrast to the primary school is the approach to child protection. As they say from the outset, they want to celebrate every success of the children and therefore photos of them will appear in publications, online and on the TV. Moreover, there was no stigma about singling out each performer during the show (and quite a number of them were really fantastic).

We’ve not made it through the whole year yet but the above is just a sampler of what’s on offer and doesn’t include such things as the excellent Halloween ball or the upcoming theatre production.