Reply To: Consolidating personal pensions into a SIPP

[Stephen Bland]

Julie, I can tell you for certain that a lot of pensioners use their HYPs for income because that in fact that is the whole ultimate purpose for which I designed the strategy. Nothing that has occurred in the 16 years or so since I first launched the HYP approach publicly has changed my view on this and my own experience and that of a lot of HYPers of whom I’m aware support it.

No guarantees of course, equity investment attracts unavoidable risk and the question is exactly as you posed, can you live with that risk as it exists in the HYP strategy? If you can’t then don’t do it. But in that case make sure that anything else in which you invest isn’t just as risky or even more so. But it is highly likely in my opinion that a HYPer who has had a good experience with an HYP for some years pre-retirement, especially if that covers some inevitable and testing poor years, will be happy to continue with it post-retirement when the income needs to be drawn.

I stress that it was never my intention for HYPs to be used as some form of temporary investment with a definite view to eventually selling and reinvesting elsewhere. That in my view would be a really risky way to approach it! You may have noticed that I refer often to eternity holding, never selling. That was always part of the strategy from the outset. Hold forever, reinvest dividends until you need them and when you do, draw all or just partially as required. That’s the HYP way.