I'm considering using uninvested cash to invest in income producing assets. Is this sensible?

22 July 2021

Question by Ian

As an alternative to getting locked in to an annuity I have long considered using uninvested cash in a SIPP and ISA to invest in income producing (dividends) assets. Since the point of saving is ultimately to produce something to live off. But the advice I have been given has always been to invest for growth. And then sell the units or shares as required. Would you agree or could you see a way of making my original idea work sensibly? If so where do I look for funds to do this?

Answered by Boring Money

Hi Ian, have you explored a tactic dubbed as Dynamic Drawdown? It uses a liability modelling method and gives you flexibility to invest for growth and income at the same time. By setting parameters around your target income you can choose to draw part income/part capital over the period and it has been shown to increase overall income potential by up to 10% when compared to more simple drawdown strategies. The first stage in deciding if this is for you is for us to have a discussion about your income needs and your attitude to risk.

Answered by

Boring Money