How would the experts invest their nest eggs?

IF YOUR pension pot is going to provide you with an income that will last the length of retirement, you’re going to have to put your cash to work.

There is a problem with investing in retirement, though. The money you have has taken a lifetime to save up, and you don’t want to blow it all now.

On top of that, as you are likely to be no longer working you can’t earn anything extra from a job to top up your losses.

Investing in a selection of funds which produce income and provide an opportunity to grow your capital should be a relatively safe way to create steady flow of cash over the years. But you have to take some time to figure out what you want to do.

You will have to take some risk by investing in company shares, but a significant proportion of your savings should be in safer bond and property funds which will focus more on paying an income rather than risking your cash.

So, what would the experts do?

PATRICK CONNOLLY

Financial planner at Chase de Vere

SOMEONE who retires at age 65 could live another 30 years, and that means the way people invest in retirement has to change.

People will now have to keep some money in equities and take a little bit of risk if they want their cash to keep growing, and to beat inflation over the length of their retirement. A good mix might be 40 pc in shares, 40 pc in fixed interest and 20 pc in property.

Artemis Global Income fund invests in a range of companies across the globe which pay good dividends. The current yield is only 3.4 pc but usually it tries to pay between 4 pc and 5 pc.

The fund has money in companies across Europe, Asia and the U.S., and biggest names include Apple, pharmaceutical firm Abbvie and infrastructure business Ferrovial.

For a high yielding fixed interest, Henderson Strategic Bond fund has the flexibility to invest in all types of company and government bonds depending on where the manager thinks the best opportunities are. Currently, it has a leaning towards banks and financial companies such as Prudential, Bupa and Legal & General. It pays an income of 5.1 pc.

Finally, M&G Property Portfolio, which has started taking a more bullish approach. It owns offices and the fund aims to increase income levels on the properties it owns by making improvements and alternations, and building rent increases into tenancy contracts. It yields 3.9 pc.

DARIUS McDERMOTT Managing director at Chelsea Financial Services:

AT THE core, my biggest investment for pension income would be the Premier Multi Asset Monthly Income fund, which spreads its money in a wide range of assets covering UK and international equities (39 pc of the fund) bonds (30 pc), property (22 pc) and some alternative things too. It yields just below 5 pc.

I also like the Legg Mason Global Income fund, which gives a more global perspective, investing in companies across France, Japan, China, Australia and the US. Some of its biggest investments include Nestlé, cruise company Carnival, and the food giant Danone, which makes yoghurts, baby food and cereals. At the moment the fund yields around 3.2 pc, but I expect this to grow over time, and the fund has returned 44 pc over the past three years.

Finally, to boost yield, I like the PFS TwentyFour Dynamic Bond fund. This has money in a range of government and company bonds from Spain and Portugal, to Coventry Building Society and Lloyds Banking Group.

This investment group is a specialist in bonds and the fund is one of very few to yield more than 5 pc.

This mix of funds should give a retiree an annual income of 4.4pc, or £4,400 on a £100,000 pension pot. It gives the saver a decent exposure to company shares, so there is still room for their money to grow, but safety in that more than half of their money is in bonds and property.

ADRIAN LOWCOCK Head of investment at Axa Wealth

THE best thing to do is plan your retirement as though you are going to live for ever. You need to choose a selection of funds that will protect your cash from any ups and downs in the stock markets while beating inflation.

Equity income funds should provide the core of your investments, with up to a third of your cash in bonds, which will provide a stable stream of income.

The Schroder UK Alpha Income fund invests depending on what the economy is doing. At the moment that means the manager likes defensive companies which should still grow and pay income even if the stock market takes a dip.

This means it has a leaning towards pharmaceutical and financial firms. Biggest investments include FTSE stalwarts GlaxoSmithKline, Vodafone, HSBC, Imperial Tobacco and Royal Dutch Shell.

The fund yields around 3.8 pc and has doubled investors’ money over five years.

For a boost to income, I like the Artemis Strategic Bond fund, which yields 4.7 pc at the moment.

The fund blends government, corporate and highyielding bonds to try to deliver income regardless of what’s happening in the economy. It owns debt from the German and U.S. governments as well as companies such as Volkswagen and insurance group RSA.

Finally, I would select the Threadneedle UK Property trust, which owns commercial property including offices, warehouse and retail space across the UK and currently yields just under 4.5 pc.