Funds to Consider in Retirement

What’s the best way to achieve a secure income stream in retirement without sacrificing total returns? And how do you balance diversification with capital preservation?

J.P. Morgan Asset Management 17 October, 2014 | 7:55AM

Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, Jasper Berens, Head of UK Funds for J.P. Morgan Asset Management discusses solving the retirement conundrum. 

The pensions revolution is now well underway, with George Osborne’s announcements bringing more clarity to the emerging post-reform framework. On the positive side, it’s clear that we are moving towards a less rigid pensions system that trusts long-term savers to make sensible decisions with their money. This should also boost the appeal of valuable initiatives like auto-enrolment, in turn helping to narrow the UK’s worrying retirement savings gap by encouraging more people to start saving for retirement earlier.

In the past, unless you had very substantial savings, your only option was to buy an annuity, with any lump sum left upon your death facing a draconian 55% tax. Under the new rules, pensions have been set free from their “locked box”. Now investors will have greater choice than ever before, with the freedom to use their pension pot as they like from age 55. What’s more, the end of the “death tax” is a strong motivation to keep money in your pension rather than spending it, leaving those funds for your retirement, or as an inheritance for your family.

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About Author

J.P. Morgan Asset Management  is the investment arm of JPMorgan Chase & Co. and it is one of the largest active asset managers in the world.

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