A Simpler Life

[morestout]

I am in my seventies, widowed and with a new not so young lady in my life. I have had an interest in investing for 40 years and have substantial ISA and SIPP portfolios that I manage with support from the Investors Chronicle , John Baron and various other sources .
I would like to spend a lot less time on my investments and am seriously considering selling everything and putting 60% into a global equity income producing tracker and 40% into a UK Government income fund.
I’d appreciate any advice re fund selection and general approach. many thanks

[DrFfybes]

Firstly, congratulations on moving forwards with someone.

You don't say what your aims are for these portfolios, whether it is to create more income, reduce capital, or whether capital preservation for children is a priority or if the current IHT exempt status of the SIPP is important, whether you want to ringfence some assets to make sure they go to your children in future. Are you a taxpayer, basic or higher rate, how close to one of the thresholds are you, are the SIPPs crystallised, etc etc.

All these things and more will affect your decision.

If simplification is your only goal then there are a few Global Trackers available, ETFs or Funds, which would suit your needs and choice would depend on your broker and their fee structure. The diffculty is that having been a 'tinkerer' up to now then letting go is not easy - trust me on that, I'd be a lot better off if I could stop tinkering.

Personally I wouldn't go 40% UK, my old Zeneca Pension was over 60% UK 20 years ago, now it is mainly Global Fund as I just left it and the UK portion has underperformed compared to the Global portion.

Personally I have a ringfenced unsheltered chunk invested in a Global Fund that is automatically sold off each month at a fixed amount, the aim being to deplete it up to State Pension age. It has met the aim of providing a steady top up income, and has not let me liable for CGT so far, although the ERI will be taxable this year. In fact the only aim it has failed at is the "depletion" goal, where it is looking increasingly unlikely to dwindle by the time I reach SP. Still, that's nearly 20 years off, so there's time yet The advantage of this is it is completely 'hands off', I went through an adviser to set it up with a negotiated fee, the platform and fund costs are low, and I regard it as a self risked annuity, except I can amend the withdrawal at any time if I need to.

This sort of thing might suit you, but without knowing what you want from/for the investments then it is difficult to make suggestions.

Paul

[xxd09]

Income…….?
A portfolio that is hands off but producing enough income to live reasonably needs to be relatively large-good luck if you posses such a beast-equity and bond income funds will then do the business though a global bond income fund might be better than gilts
Most investors (like me) will go for Total Return with a global equity index tracker and a global bond index tracker hedged to the pound -selling a tranche of fund units once a year to top up a living expenses cash account
Most investors will keep 2-3 years of living expenses in cash
Portfolio is then 2 funds only plus a cash account
Simple cheap and easy to understand and manage
xxd09

[Urbandreamer]

While I personally agree with the questions of UK bias, you might consider Vanguards Lifestrategy funds.
These are a mix of global equity trackers and global bond funds.

You can easily achieve your 60/40 split, though there is a slight UK bias in the global equity component that is not what I would chose. It does work though as a "one stop" shop to achieve your requirement to simplify.
https://www.vanguardinvestor.co.uk/inve ... s/overview

I don't like bonds, so couldn't recommend any bond fund.
I do own VWRL, a global tracker that distributes the yield. The issue would be that it does so in $'s so you pay FX.

[morestout]

Thanks for the very helpful replies.
I am a basic rate taxpayer with limited drawings from my SIPP supplemented by dividends from my ISAs and the state pension. Assuming a Labour government, I anticipate paying a Lifetime Allowance charge on my SIPP so any possible suggestions on minimising this would be much appreciated.
My aim would be to draw 3%/4% on the combined new investments with ideally, hopefully some degree of capital appreciation . My intention would be to gift some of the money in the ISAs to my children over time to reduce IHT with me largely living off the SIPP and state pension.
I would appreciate some suggestions for global equity or bond options (UK or Global?) as it’s not an area I’m familiar with. My investments are currently with HL. I’ve fairly negative about the prospects for the UK so would be tempted to be unhedged but is this reckless?
many thanks

[bluedonkey]

Do your existing investments actually need managing? If you just left them as they are now, what would be the problem that you feel would be solved by the change you propose?

[AJC5001]

My aim would be to draw 3%/4% on the combined new investments with ideally, hopefully some degree of capital appreciation . My intention would be to gift some of the money in the ISAs to my children over time to reduce IHT with me largely living off the SIPP and state pension.

My preference would be to live off the state pension plus a withdrawal from the SIPP to take advantage of the income tax allowance, followed by withdrawal from the tax-free ISAs. This would leave the remainder of the SIPP to pass to children, currently free of IHT. If the ISAs run out, then the SIPP would have to provide the income.
I would also be aware of the need to review this if a future government changed the rules on IHT, SIPPs or ISAs.

Adrian

[Arborbridge]

Income…….?
A portfolio that is hands off but producing enough income to live reasonably needs to be relatively large-good luck if you posses such a beast-equity and bond income funds will then do the business though a global bond income fund might be better than gilts
Most investors (like me) will go for Total Return with a global equity index tracker and a global bond index tracker hedged to the pound -selling a tranche of fund units once a year to top up a living expenses cash account
Most investors will keep 2-3 years of living expenses in cash
Portfolio is then 2 funds only plus a cash account
Simple cheap and easy to understand and manage
xxd09

I think most investors are like me, not you

[DrFfybes]

Thanks for the very helpful replies.
I am a basic rate taxpayer with limited drawings from my SIPP supplemented by dividends from my ISAs and the state pension. Assuming a Labour government, I anticipate paying a Lifetime Allowance charge on my SIPP
[...]
My investments are currently with HL. I’ve fairly negative about the prospects for the UK so would be tempted to be unhedged but is this reckless?
many thanks

With a SIPP that size you might be paying a LOT in fees with HL, especially if you have or move to Funds rather than shares, up to £4kpa for the Pension alone. It might only be 0.25% above £500k, and shares capped at £200, but with a fixed fee broker like ii you would be paying £13/month, or £22/month if you move your ISA to them as well, so max of £264pa.

Paul