Can I/Should I cash in Pension??

Sugar_Ape

Apologies if this been asked before but I'm new to this!!

Im 32, have a Scottish Widows personal pension plan which is currently worth £10'300, Im paying in £100 per month, I'm also contracted out of SERPS (not totally sure what that means TBH)

Im very worried about the current financial climate and wonder wether i'd be better off cashing in and doing something else with the money??

Thanks for any advice..

MrChips

It really depends what sort of investor you are and what you are looking to get out of your pension. Conventional investing would suggest it is better to buy low sell high than to buy high and sell low.

Also, what do you mean by "cashing in"? As a 32 year old you can't withdraw your money from the pension "wrapper" although you can alter what it is invested in. You can start taking the pension from age 55.

dunstonh

Im very worried about the current financial climate and wonder wether i'd be better off cashing in and doing something else with the money??

What are you worried about? Its a recession. Its what happens typically once in every decade. You will have at least 3 more of these before you retire. At age 32 its good news for you on the investments front. You are now buying units at 2004 prices.

Sugar_Ape

MrChips wrote: »

It really depends what sort of investor you are and what you are looking to get out of your pension. Conventional investing would suggest it is better to buy low sell high than to buy high and sell low.

Also, what do you mean by "cashing in"? As a 32 year old you can't withdraw your money from the pension "wrapper" although you can alter what it is invested in. You can start taking the pension from age 55.

Thats the thing, Im asking SW what my options are and am not really getting an answer!!
I have very little knowledge of investments etc, but with the financial climate seeming dodgy to say the least im just nervous about the future

If I cant cash in then thats the end of it I spose??

dunstonh

Thats the thing, Im asking SW what my options are and am not really getting an answer!!

They cannot tell you. They would break rules if they did. To give advice or opinion you have to hold authorisation to do so. SW dont hold that authority unless you see one of their sales reps at Lloyds branches. However, the LLoyds tied advice process prevents tied agents from telling you to stop/switch or surrender investments. So, the only place you are going to get the advice you are after is from an IFA.

but with the financial climate seeming dodgy to say the least im just nervous about the future

I guess at age 32 you dont remember the recession in the 90s, 80s or 70s. There have been 8 financial crisis since 1956. Averaging once every 7 years. This one just had a longer gap than normal and the bubble was effectively bigger so it making a bigger bang as it bursts.

You dont panic when they happen as you know its going to happen and it will happen multiple times throughout your life.

jamesd

Sugar_Ape wrote: »

Thats the thing, Im asking SW what my options are and am not really getting an answer!!
I have very little knowledge of investments etc, but with the financial climate seeming dodgy to say the least im just nervous about the future

If I cant cash in then thats the end of it I spose??

SW are only allowed to tell you what investment are available within your pension. You can then choose to move some of your money around between those investments and/or change what your new contribution money is buying.

You could switch to a money market fund if you're worried, or to a cash fund. But that's probably unwise. You'll probably have seen some drop in value during the price drops and you shouldn't really be thinking of taking that loss now by moving out of the markets. Better generally to stay in and hen get he money back during the recovery, while being happy that your current contributions are buying at cheaper prices.

It's illegal for you to cash in your pension so you can safely forget all about that until you're 55, when you'd be able to take 25% as a lump sum if you had a reason to want to do that.

You should be paying careful attention to the investments you select. That's a vital part of how your money will grow over the years.