taking a pension now, after Brexit????

halsteadl

I am 56 & have not been well so will have to work part time in future. I have been investing taking my pension from September this year.
This morning we are told that we are leaving the EU, the pound has dropped to an all time low and Cameron is resigning.
Would i be making a really bad decision if i went ahead and retired early or should i get through the next couple of months or years and look to retire in the future?
Cheers

kidmugsy

Tell us about your pension.

Linton

Brexit is one of the least important factors you should consider when deciding when to take your pension.

TadleyBaggie

halsteadl wrote: »

the pound has dropped to an all time low

It's not even close to its all time low, I can recall the £-$ rate around 1.03 in the 80's.

edit: Just checked the Bank of England official rates, on the 26th Feb 1985 the rate was 1.042.

dunstonh

The financial impact on Brexit is not that big. Markets are down around 4% currently. Sterling is low but its early after the event. However, last Autumn, we had a 20% market crash. Currently, the FTSE100 is higher than it was 2 weeks ago.

warehouse

Wait it out, by Monday it should be over.

enthusiasticsaver

My husband is retiring end of October so I wondered the same thing. He however has been offered a deal with his existing pension scheme and has part DB scheme and part DC. Obviously his DC part of the scheme may be affected but we engaged an IFA in April to ask further questions from OHs pension provider and will be discussing our options in August a little bit closer to the time so don't intend to delay his retirement.

It actually looks as if the European markets are affected more than the FTSE. My investments do not appear to have dropped significantly but then I am invested in a global tracker fund. Your decisions should be based on how and where your pension is invested and the terms - is it DC, DB? Have you had a quote from your pension provider? Do you have the option of using other income (savings?) or continuing to work part time and delay taking pension if you would take a big hit by disinvesting now?

dunstonh

My husband is retiring end of October so I wondered the same thing.

If he is planning annuity, then he should be in cash. So, no impact. if he is planning drawdown, then this is just the sort of market event that occurs on average every 7 years. So, it shouldnt come as a surprise or be a concern.

It actually looks as if the European markets are affected more than the FTSE.

FTSE100 is more globally linked and the fall in sterling offsets the value somewhat.

My investments do not appear to have dropped significantly but then I am invested in a global tracker fund.

That is a very high risk approach, suggesting that a drop of 4-5% shouldnt be a concern when its capable of 50% loss in 12 months.

Also, the reason you wont see drops in your value yet is that unit trust/oeics are priced at close the night before and pension funds can be priced a further day behind.

halsteadl

Thanks for all your comments. It is a stakeholder pension where I can take up to 25%, pay tax on the rest then buy an annuity.

I think that I too will investigate it in August and then make my decision as to whether to take it in September or wait until I'm 60.
Xx
cheers

saver861

dunstonh wrote: »

The financial impact on Brexit is not that big. Markets are down around 4% currently. Sterling is low but its early after the event. However, last Autumn, we had a 20% market crash. Currently, the FTSE100 is higher than it was 2 weeks ago.

It's not so much the reality but the perception. People will be reacting to perceptions.

It just takes the word stampede in an crowd to create that exact thing - even when there was no danger in the first place.

jamesd

halsteadl wrote: »

Thanks for all your comments. It is a stakeholder pension where I can take up to 25%, pay tax on the rest then buy an annuity.

You don't need to buy an annuity with the rest. That requirement was first eliminated in 2006 when something called the Alternatively Secured Pension was introduced and successive governments have further increased flexibility. I suggest that you learn more about income drawdown, which just means staying invested and taking an income from your investments.

Today you're allowed to take the whole of the remaining 75% on the first day if you like, or at any other rate. This taxable part is added to your normal taxable income in the tax years in which you take it so it is not normally a good idea to take it all at once because that would mean lots of higher or even top rate income tax to pay.

You're far too young for a standard annuity to be a decent deal, that doesn't really start to happen until after age 80. But t's possible that whatever your ill health is is something that would reduce your life expectancy. Enhanced annuities are available in that case which pay more than a standard lifetime annuity. However, it's still unlikely that at your age they will pay more than drawdown. But if you do go the annuity route with some of the money, definitely don't just go and buy a standard annuity, it's vital that you get one that considers your medical condition!

Continue to make pension contributions, as explained in the drawdown topic there's up to £720 a year of free money to be had from the kind people at HMRC.