advice on private pensions

foxybabe

I wonder whether anyone could advise me on what to do with two private pensions.

My husband (43) has been paying £100pm into a pension (scottish life talisman) for the last 20y. he opted out of serps at the same time.

I (45) have been paying £50pm (abbey) for about the same amount of time and also opted out of serps.

We are really unsure what the best thing to do with them would be. Should we freeze them and continue to pay the money into a regular saving acc with high interest or are we better to keep them?

Does it mean that we will not get any state pension as we have opted out of serps??

tbh the statements go over the top of my head. i don't even want to think about how much would be in the bank if we had just saved it in the first place!!!!

dunstonh

Should we freeze them and continue to pay the money into a regular saving acc with high interest or are we better to keep them?

What are your reasons for wanting to to do that?

Does it mean that we will not get any state pension as we have opted out of serps??

Contracting out of S2P has no impact on the basic state pension. Its just the second state pension (and Serps as it used to be).

i don't even want to think about how much would be in the bank if we had just saved it in the first place!!!!

Probably a lot less if you had put it in the bank.

Markets zig zag in value and this is not the first bear market and wont be the last. I heard the other day that there had been 8 financial crisis since 1956 and they average once every 7 years. You dont mention where you are invested, which is very important as you get returns based on where you invest, not because its in a pension, ISA or other tax wrapper. Assuming stockmarket (and that assumption is probably wrong in your case as you are probably not 100% stockmarket but 50-60% ish), every time a bear market occurs your monthly payments are buying investments cheaper than before. They are the ones that make the most money when things go up. The last major stockmarket drop was at the start of the millenium and it dropped by more than this has currently (less than 1% in it now though). So, what did you do that time round? I assume you did nothing and carried on buying units much cheaper in that period, just as you are now.

If you are not able to review and monitor your investments yourself, then why not use a servicing adviser. Both of your pensions are priced on the basis of an adviser being used. So, get them reviewed by an IFA and make the IFA earn their money.

foxybabe

Hi,thanks for that. From your reply, I think I can safely say that we should keep them then. The reason I thought about freezing them is that everyone seems to have the opinion that it is a waste of time having a private pension as they don't pay out much when it comes to collecting them.

I know that the markets change all the time and I am not a doom and gllom merchant at all and I know the markets will recover again. I think maybe we need someoe to look at them in detail who really understands them and get some advice.

EdInvestor

foxybabe wrote: »

I (45) have been paying £50pm (abbey) for about the same amount of time and also opted out of serps.

If you had paid this money into a deposit account over the period and achieved an average (net of tax) interest rate of 6% you would now have 22,782.

How does that compare?