cashing in pension. . or not

jem16

SSTEPHANIE wrote: »

What does a return of 7% mean ? I thought that was interest onto the amount I have in the pension added on over the next 10 years ??:o

Pension funds have a value at which they are bought. Over the years you hope that this value will increase. Sometimes the value will increase, other times the value will decrease but over many years it should increase overall. It doesn't go up in a straight line - it zig zags. However there is no guarantee that it will be higher. The more risky the funds the higher the increase in good times but higher risk funds also mean the more it will decrease in bad times. The closer you are to retirement would generally see a switch into lower risk funds.

If after 10 years your fund value has increased by 70%, you can say that the return has averaged to 7%pa. ( ignoring effects of compounding just for easiness)

Only cash savings accounts have interest paid.

Also, I was refused for a Halifax credit card recently and if I get refused for applying for a current account, will that not reduce my credit rating?

Yes it can do.

SSTEPHANIE

hmmmm. . . . still thinking !

I cant help feeling that at least the lump sum and tiny annuity will help me now, in ten years time it will all have changed so much, and will it really hold it's value ? (in the literal sense) .

I do dabble lightheartedly with investments, I have shares in windfarms and a football club for examply. There it was a lump sum not big enough to change my life immediately but not small enough to fritter away regardless!

jem16

SSTEPHANIE wrote: »

hmmmm. . . . still thinking !

I cant help feeling that at least the lump sum and tiny annuity will help me now, in ten years time it will all have changed so much, and will it really hold it's value ? (in the literal sense) .

Your pension would be expected to not only keep up with inflation but also to grow ahead of inflation - however there is no guarantee.

Annuity rates for your age are very poor and will definitely be better if you take it later.

However only you can decide.

jamesd

Better to wait and not take any of the pension now. It's just not going to really help you enough now to be worth the loss of income later.

Trying to make more money and save money with offers seems like a better idea.

SSTEPHANIE

EdInvestor wrote: »

A Sipp is a self invested personal pension, it's just another type along with a stakeholder or a personal pension.

What interest rate are you paying on your debt?If you are using the £500 to pay it off, then we can compare the likely return from that with the return from investing the money.
Usually paying off debt first is best.

BTW where is the pension now, which provider?

(TV licence, dentist + £300 off MBNA 14.9% £1,800 ish) what sort of investment am I looking for to do with the balance ; and is there anyway I could look to take out the balance as a lump sum in ten years? Is with Barclays Pension.

Is that enough info?