holiday from Stakeholder payments?

Baalmaiden

My L&G yearly stakeholder pension statement has just come and shows that my pot of money has reduced by a third from last year. Should I take a break from payments and put the money in a savings account for a year instead? Paying monthly as normal looks like throwing good money after bad. I have a lifestyle plan which switches to bonds in 2010. I could always pay in a lump sum when /if times get better. What would you do?

Fairdo_2

There is a little thing called pond-cost averaging that could make it seem worthwhile keeping up the contributions. Even maybe making the contributions more regular to monthly instead, if that is feasible?
There is also a saying that may help, "Be fearful when others are greedy, be greedy when others are fearful"
If you have a lifestyle fund, that will be building in an element of safeguard at that point, but if you are buying units when they are low, that can be a good thing in general terms.
You should also have the ability to switch funds at this stage if you are fearful that prices will still go down further and you are concerned that they will not have time to recover before you take the benefits.
A lot of this will be down to your own personal attitude to risk and how long there is left to go.

Debt_Free_Chick

Baalmaiden wrote: »

My L&G yearly stakeholder pension statement has just come and shows that my pot of money has reduced by a third from last year. Should I take a break from payments and put the money in a savings account for a year instead? Paying monthly as normal looks like throwing good money after bad.

Another way to look at this .... the investments you bought last year were more expensive than they are now. So .... should you buy now, when they're cheaper? If you think the investments are right for you and you believe they will increase in the future, then you buy now when they are cheaper

dunstonh

This is the 8th financial crisis since 1956. Thats an average of one every 7 years. The last major stockmarket decline was 2001-2. This is what the stockmarket does. Some years up, some years down. However, over a period of time that zig zagging historically goes upwards. Its times like these when those paying monthly contributions actually benefit the most as its these payments that buy the most units which then go on to make the most money when things go back up.

If you only have a short time left then you do have to question what you are doing in a medium/high risk fund and why you havent reduced the risk of your investments already.

Baalmaiden

I'm already paying monthly and can take a holiday from payments with this scheme, but whatever I do I can't change what's already invested, so I shall keep paying for now in the hope that the stock market will rise again before 2010. It was useful to hear your views. Thanks!

balmaiden

Hey somebody with my name. Almost, could be confusing.

Baalmaiden

Baalmaidens were the ladies who worked on surface in the mines, or in my case the china clay pits. Luckily I have an indoor job now. (for the moment!)