Should I freeze my pension?

NickyL_2

Hello, I wonder if anyone could advise me about this - I have been paying into a stakeholder pension for 5 years - paying £50 per month (I am 39). I have been advised at work that I should perhaps freeze my payments for a year or so and pay the money into an ISA, then the money I have saved I could pay back into the pension fund when I decide to unfreeze it. Is this a wise idea? Many thanks for any help anyone can offer.

purch

An acquaintance of mine who was a non-Independant Financial Conman used to have a saying "Freeze your Pension when you are in your 30's and you'll definately freeze when you're in your 60's" or something similar...


Anyway that has nothing to do with the Q...

I can't see the logic or benefit of the advice.

If the idea is that Cash savings will grow more than any other Investment choice, then you can probably still make that decision with your Pension Fund and direct your contributions into your providers Cash Fund.

The risk is that if you don't put the money into the Pension now, it may never end up there.

dunstonh

What are your reasons to cease the pension contributions?

Be wary, work place myths are some of the most misguided out there. The number of times I have heard truely awful advice given by workmates is unbelievable.

NickyL_2

The advice came from someone who had been advised by their own Financial Adviser to freeze their pensions in view of the current economic climate. Presumably as other investments are being affected (endowments etc) then pensions will also be affected?

nomoneytoday

IMHO it's a good time to buy equities through a pension as they are at bargain prices not seen for years

dunstonh

The advice came from someone who had been advised by their own Financial Adviser to freeze their pensions in view of the current economic climate.

That is totally the wrong thing to do. Events like this occur on average once every 7 years. The stockmarket dropped more in the last one at the start of the millenium then it did this time.

If you stop buying units every time they have gone down and buy them only after they have gone up then you will never make any money. You buy them now when they are cheap as these will be the ones that make the most money.

Tell the person that gave you the information that they have a idiot for an adviser.

NickyL_2

OK, thanks for that advice, being quite ignorant of the exact workings of these things it is easy to get scared by other people. I may not be brutal enough to tell them their Advisor is an idiot though!!!