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You have searched Pension Funds. This can really be split into two subjects:
Pension funds as in the fund of money accrued in a pension and pension funds as per the funds that investors use when buying pacakaged investments.
The main different types of pension that funds can be accrued in are:
Personal Pension
Retirement Annuity (Section 226)
Contracted out Money Purchase
Contracted in Money Purchase
Final Salary
Section 32
Executive Pension Plan
Self Invested Personal Pension
Small Self Administered Scheme
These are just some of the main type of pension fund but there are others.
There are different rules sorrounding pension funds depending on the type of fund you own. The rules cover areas such as maximum charges, investment type, retirement ages and permitted investments and it is very important to be aware of the differing rules.
All funds whatever wrapper they have been accrued in are designed to provide income in retirement. Again there are rules as to either how much you can contribute to a pension fund or how much can be taken out. The amount that can be taken out is usually a mix of cash and regular income.
The second area that you search my have been looking for is with regards to the type funds you are able to use when buying collective investments.
These are usually split into different assett classes the main ones being:
Cash
Corporate Bond
Govt Bonds
Property
Equities
The different assett classes carry different levels of risk and in most cases but not all it makes sense to have a spread of the different assett types with a weighting towards certain assetts so that it fits your particularly risk profile.
It is essential that you appreciate and understand risk in the context of investment advice. There are important points here.
·Every investment carries some risk; some investments carry much more than others.
·The potential for higher returns will mean that you will be taking more risk.
·Investment risk can be absorbed if you have longer-term investment objectives.
·Investing gradually reduces the risk of buying at the wrong time.
·Investing in fixed rate products reduces the risk of interest rates decreasing and reducing returns.
·Spreading your investments across products or providers reduces risk, i.e. eggs and baskets.
·Investing in overseas assets adds the risk of foreign currency movements.
The level of risk you are prepared to take will be a personal decision influenced totally by individual circumstances. In developing your own personal savings/investment strategy it often simplifies the process to consider investments by degree of risk.
One method is to group types of investment into three main categories LOW / MEDIUM / HIGH. John Davison an IFA At Myers Davison Ginger Ltd believes howver that these are unreliable definitions.
What is high risk to one individual may be low risk to another. It is more appropriate to recommend investments after we have discussed their characteristics with you.
How much risk you wish to take in meeting your objectives will always be a balancing act between the goals you wish to achieve, the amount of risk you are prepared to accept and the possible returns commensurate with the level of risk.
Funds are then split down into sectors and the main ones are:
Managed
UK Fixed Interest
Cash
Global Fixed Interest
Property
Currency
UK Gilt
UK Equity Income
UK All Companies
Global Equities
North America
European
Far East
American, European and UK Smaller companies.
Pacific Basin
Emerging Markets
Technology
Specialist
With the help of a good adviser you should be able to put together a portfolio of collective investments to suit your risk profile.
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