Pension

ruthdoyle

I have a small pension which I should start drawing in November 2022. The funds have dropped from £46,000 to under £30,000 in 3 months. Can I defer drawing the pension and hope the funds increase over the next couple of years?  I need a financial advisor but have little money and don’t know who is reliable. Thanks 

molerat

More information about the type and provider of the pension.  Quite possible you can delay taking the pension without advice, many "retirement dates" are just points of reference for quotes and lifestyling of investments rather than a set in stone retirement date.

msallen

This sounds like a DC pot (rather than a defined benefit pension such as one based on your final salary) in which case you are under no compulsion to take it on a particular date.

I doubt a financial advisor would be interested in advising on a £30K pot sorry.

Marcon

ruthdoyle said:

I have a small pension which I should start drawing in November 2022. The funds have dropped from £46,000 to under £30,000 in 3 months. Can I defer drawing the pension and hope the funds increase over the next couple of years?  I need a financial advisor but have little money and don’t know who is reliable. Thanks 

You say 'should' - but if this is some sort of personal pension, it's highly likely you can pick a later retirement date if you wish - how old are you now? Check with your pension provider to be quite sure what your options are.

A financial adviser isn't a magician and won't be able to foretell the future, and with so little in the pot, it's unlikely to be money well spent if that's the only reason for consulting one.

snowlaser

It sounds as others have said that this is a Defined Contribution / Money Purchase pension, in which case it's likely that yes you would be able to defer it (but why not ask the provider, who would know for sure?)

If it is DC, and if your plan is to buy an annuity with the pot, you should find that annuity rates are better than they were 3 months ago, so even if the pot has fallen in value the actual pension you get hasn't changed as much, once you factor in that buying a pension is cheaper.  I don't know if that changes your view, but again you should ask the provider for a quote of the pension and not just the pot.

Brie

I have 2 defined contribution schemes that i am delaying on for this exact reason.  I hope they will recover sufficiently for when I really do need them in a couple of years.  

frankly an IFA will see very little profit in the size of fund you have (a couple I talked to were really unimpressed with my "fortune") but you can still gain some insight if you get a free initial session with them.  it's intended for you to get a sense if you trust the individual and are happy with fees but they may provide some good throw away advice which can be helpful.  Also check to see if the fund the money is held with offer any advice.  I had one of my works pensions offer a free one off one hour investment session which was helpful.

Marcon

snowlaser said:

It sounds as others have said that this is a Defined Contribution / Money Purchase pension, in which case it's likely that yes you would be able to defer it (but why not ask the provider, who would know for sure?)

If it is DC, and if your plan is to buy an annuity with the pot, you should find that annuity rates are better than they were 3 months ago, so even if the pot has fallen in value the actual pension you get hasn't changed as much, once you factor in that buying a pension is cheaper.  I don't know if that changes your view, but again you should ask the provider for a quote of the pension and not just the pot.

Anyone who wants to buy an annuity needs to shop around, not just go with the provider with whom they are saving. See https://www.moneyhelper.org.uk/en/pensions-and-retirement/taking-your-pension/shopping-around-for-pension-income-products-at-retirement