Pension in these dark times!

wymondham

Quick question!
Am I right in thinking that if you have a pension then with the recent falls it's a good time to increase your contribution to take advantage of this?

dunstonh

the pension is just a tax wrapper. Its the investments within it that matter. So, your question applies equally to ISA or other wrapped or unwrapped investments.

The answer is potentially yes. Long term regular contributions are now buying cheaper units on equity funds. In the long run these will make more money than those bought a year or two ago.

The only people that are really worse off now are those that kept in equities and are taking the money out or maturing the pension now or in the near future. They should have been phasing the risk down over the last 5 or so years by moving the funds into lower risk investment areas. Those that are long term shouldnt be as concerned. Remember that a bear market does average once every 5 years and for regular payments, thats not a bad thing.

wymondham

dunstonh wrote: »

the pension is just a tax wrapper. Its the investments within it that matter. So, your question applies equally to ISA or other wrapper or unwrapped investments.

The answer is potentially yes. Long term regular contributions are now buying cheaper units on equity funds. In the long run these will make more money than those bought a year or two ago.

The only people that are really worse off now are those that kept in equities and are taking the money out or maturing the pension now or in the near future. They should have been phasing the risk down over the last 5 or so years by moving the funds into lower risk investment areas. Those that are long term shouldnt be as concerned. Remember that a bear market does average once every 5 years and for regular payments, thats not a bad thing.

as ever, many thanks Dunstonh!