For decades, Andrew Greenaway, now 70, trusted the conventional wisdom of financial advisers with his retirement savings. It was a 2022 political event that finally spurred the Belfast retiree to take the helm of his own financial future—a decision he now wishes he had made much sooner.
The Wake-Up Call: A Mini-Budget Spurs Action
Andrew, like many savers, had his pension invested in passive funds managed by an independent financial adviser (IFA). The strategy followed the traditional path of decumulation, where funds are gradually shifted from equities to bonds as one ages to reduce risk. However, the fallout from Liz Truss and Kwasi Kwarteng's 2022 mini-Budget served as a harsh wake-up call. "I lost so much money because of Truss and that debacle," Andrew admits. Witnessing the impact on others, who asked 'where has all my pension gone?', he realised he needed to understand and manage his investments personally.
Taking Control: From Overwhelmed to Empowered
After consulting his IFA, Andrew opened a self-invested personal pension (SIPP) with Bestinvest. Initially overwhelmed by the information available, his fear subsided as he educated himself. His first major discovery was a startling lack of diversification: over 70% of his pension was invested in US companies, with a heavy concentration in tech giants like Meta and Apple. He promptly began selling down this exposure to mitigate risk.
Drawing on his career in high-security public sector environments, Andrew wanted to invest in defence companies. He found this challenging due to widespread Environmental, Social, and Governance (ESG) restrictions in many funds. After considerable research, he identified funds tracking defence-sector companies and now allocates roughly 25% of his pension to this area.
Strategic Diversification and Impressive Growth
Andrew's new strategy focused on broad diversification:
- Geographic Spread: He reduced US holdings to just 23% of his portfolio, redistributing funds into Asia, Japan, India, Europe, and the UK.
- Company Size: He ensured a mix of large-cap, medium-sized, and smaller companies with growth potential.
The results speak for themselves. Since opening his SIPP when his pension was worth £185,000, he has grown it to £245,000 in just over two years. Despite market volatility, such as fears during Donald Trump's tariff announcements, Andrew held his nerve.
Key Advice for Other Savers
Reflecting on his journey, Andrew offers crucial advice for anyone with a pension they don't fully understand:
- Use Free Guidance Early: He didn't visit PensionWise until he was 62, but regrets not using this free government service available from age 55.
- Consolidate Pensions: He amalgamated five separate pensions into one SIPP with Bestinvest. "If it's all in one pot it's a lot easier to handle," he says, noting it prevents unintentional over-exposure to certain funds or sectors.
- Seek Initial Professional Help: He recommends getting a financial adviser to help navigate the initial steps.
- Break the Traditional Mantra: He urges savers to move away from the automatic 60% bonds, 40% equities model in retirement.
"There is nothing to be afraid of," Andrew concludes. "The only regret I have about going it alone is that I didn't do it sooner." His story is a powerful testament to the benefits of engagement, education, and strategic diversification in pension management.
