How To Invest Your UK Pension Drawdown For Taking Income

Investing your UK Pension Drawdown usually requires a different strategy to when investing your pension pre-retirement, and this video simply explains the important considerations.

TIMESTAMPS
0:00 Start
1:14 Why Is Pension Drawdown Investing Different?
2:49 What Are The Main Drawdown Investing Considerations?
7:51 Example Pension Drawdown Strategy - Cash Management
10:37 Example Pension Drawdown Strategy - Natural Yield

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✅ ABOUT HOW TO INVEST YOUR UK DRAWDOWN ✅

When retirement planning, you need to consider a different investment strategy for pension drawdown because retirement income planning carries different risks to building up money pre-retirement.

So what are the risks of pension drawdown? The main one is ensuring that your capital can sustain your withdrawals for the rest of your life, because pension drawdown withdrawals are not guaranteed. This means that things like sequence of returns risk come to the fore when investing drawdown funds.

In this UK pension drawdown video I explain in simple terms the key financial planning considerations and some examples of tried and tested retirement income strategies.

If you're looking for UK pensions explained simply, you're in the right place 😀 This channel provides CLEAR, STEP BY STEP INFORMATION on all things pension, retirement, tax and investment planning in the UK. So don't forget to subscribe and turn on notifications!

**** DISCLAIMER ****
The content in this video is provided for information and entertainment purposes. It should not be construed as direct or indirect financial advice. You must throughly research any potential financial or investment decision and fully understand the risks before taking it. If in doubt, you should seek individual advice from a professional adviser.

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[duncansmith]

What great videos! Really helpful and enjoyable. Many thanks Chris.

[SteveKestin]

Great advise. Sequencing risk is my biggest headache with 5 years left until I plan to retire aged 61 (hopefully).
I am currently building a cash reserve in ISA"s and high interest accounts. Hope to get to somewhere between 2 and 3 years of cash and then leave my SIPP invested in a couple of global funds. That way you still receive interest from the ISA’s etc rather than having it in the cash account of the SIPP and can live off these until the market recovers when I will sell from the funds to replenish
Seems the best strategy to me

[jcm]

With your knowledge, content, and excellent delivery, I am very surprised you are not on 100K+ subscribers.

[strangerist]

Well, that's given me a few things to think about. Very useful, thank you!

[BobBob-uvfq]

It will be great knowing things are just about in place, ,but just keep working

[nickfifield]

Second comment 😂 the cash account is some what similar to the 3 bucket method. The elephant in the room is when is a “good” time to move money into the cash pot …. When the market goes up 1%, 5%, 20%?…. Tricky right …. What would an advisor do? 😊

[Andy.N-_-]

Really interesting, and some great stratagies to consider .

[nickfifield]

Firstly, top channel! Excellent source of information. 👌🏻

Why not produce a course, not all of us wish to pay for an advisor but would be willing to buy a course ….
What I find most annoying about advisors (sorry) is that most won’t be clear about costs up front . I once paid an advisor to review my pensions. Charged me a small fortune . Then, only after hours of my time, offered to move them to “better” funds and platforms for a fee…. Would have cost more than 10k…. Instead I educated myself, took control and moved them myself . I’ve been learning, reviewing and managing them since. All good.

Glad you mentioned bonds are, at least at the moment, terrible . I wrongly understood bonds were safe, not the case when in funds !

[bobdunn]

Hi Chris. Thanks for the reply and largely agree. Although I’m not a tax expert so I don’t really get the last but. Pension only I think?re selling my stocks I’m not advocating wild capital volatility (100% equity) but good income portfolios have fallen less than say a vanguard 20%, 40% and 60% equity this year and outpaced them last so the risk appears similar but I get my income of 5%. Selling at depressed levels applies to both income and capital portfolios but, for example, if I needed 7% temporarily I’m better selling 2% and getting 5% than selling 7%. Being in vanguard this year and needing 5% would have been terrible. Milk the cow don’t kill the cow I say

[ronniefoxxx]

but if your pension is invested well, why would you drawdown more than you need to re-invest it, other than into an ISA - but that would need to be quite large to provide income from growth?

[chrisf]

Of the two options you describe at the start of the video, I have to admit that the higher-risk portfolio sounds a lot more attractive ! I recently retired in my early 50s, and I'm still keen to maximize my returns even though I could probably afford to slow down and de-risk. That's probably not very rational but I find it really difficult to shake the competitive urge. Right now I'm trying to follow a version of what you describe as the cash management strategy (i've sometimes heard of it as "time bucketing" too); I keep around 5 years in premium bonds and very low-risk funds, with the rest in equities. Two years feels a little low to me, but that's just my preference. Anyway, just wanted to say that I enjoyed the thought-provoking video and really appreciate the effort you put in, Chris. Your content is top notch.

[willie]

Nice vid Chris, good to see those subs. creeping up....

[manishrana]

Amazing video..plz make more video like this .

[abmaddison]

Good video. Answers some questions I had.

[dubsdolby]

Hi Chris
Most advisors mention these drawdown options. What about people like myself who have a sipp that produces income from dividend payments that are paid in cash and sits in your cash account and is taken rather than being re invested. Then there really isn't any drawdown, just dividends, providing your income. There are a lot of good quality blue chips paying 8% upwards at present.

[johnshepherd]

Thank you. I found this video so helpful 😊👌👌

[myminipda]

WoW, what a great video. Keep them coming

[martinaston]

My problem with advisors is they win either way, if your investment Tanks they, ll have the excuses and you still pay there fees, in my eg Total platform fees equate to approx 22% of “Growth” on the entire Pension Pot, summary advisors operate a win/win reward scheme for themselves …

[garyoconnell]

It’s quite strange that I ask a question to myself about pensions/investments and then, as if by magic, one of your great videos pops up Chris answering my question 👌 I’ve been watching for a while now and learned so much, thank you. You never know, my pension pot may grow enough with your advice that I’d be able to secure your services on how to deploy it in retirement 😉

[torus]

I'm planning to keep invested and just take dividends and bond income out if needed. I'm not looking to sell anything and leave the capital to charity when I go belly up. This way I never have to worry about having to sell in a major down market. Have a look at bond yields now at the end of 2022, bet you never thought you'd see these again.