Why Are Cash Funds In My Pension
Published / Last Updated on 27/02/2019
Why are there Cash Funds in my pension fund recommendations when I want to take +/-10%, +/-20% risk etc and/or I have cash elsewhere?
Most pension schemes offer a cash fund. There are many reasons that people have a cash fund in your pension.
This may be helpful if you are extremely low risk and are prepared to accept that charges and inflation may wipe out any profits/gains or even devalue your pension over time with inflation.
It may only be a small part of your pension designed to pay out an income to you or top up/hold for fund/scheme management charge deductions.
It may be that as part of a balanced portfolio, and to keep you within your attitude towards risk and tolerance to investments losses, that a proportion of your pension is in a cash fund to balance off other higher risk/volatile funds.
It may be that the cash fund is simply used as a 'safe haven' fund in times of market volatility as a 'cash park'.
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