Pension contribution Panic

Audaxer

Spivo46 said:

Pat38493 said:

Someone once said “the stock markets reward the patient, and punish the rest”.

As Dunstoh said, when markets go down you are buying units at a “bargain” price.  The question is not what is your investment worth today but how will it evolve over the next decades until and after your retirement.  Long term history indicates that it will probably increase but with a lot of short term volatility.

I am in the same situation - putting money in at the full AA rate but my investments balances are pretty much staying static as they are losing money as fast as I’m putting it in.  I will stick to my guns. 

Thank you, i appreciate the feedback. My main concern was the short term (in 12 months) when i want to take as little of the 25% tax free as possible, but still around 10%. At that point i will be "locking in some losses" with a view to eating into it yearly going forward. Its just bad timing and misfortune. I don't think pension information is shared at the level it needs to be generally. I would estimate the majority of the population don't really understand that is a certain amount of gambling involved. 

If you need access to some of your tax free money in 12 months, I'm not sure why you are about to pay in £17k of your redundancy money to your pension. Can you not hold that money back to use in 12 months time, instead of taking tax free money out of your pension? 

SouthCoastBoy

Personally I keep any short term spending ( in my case that definition < 5 years) I keep as cash, currently I have more than 5 years cash more like 10 years. When cash reserves are low < 3 years I will look to top up when stocks are high.

Spivo46

Audaxer said:

Spivo46 said:

Pat38493 said:

Someone once said “the stock markets reward the patient, and punish the rest”.

As Dunstoh said, when markets go down you are buying units at a “bargain” price.  The question is not what is your investment worth today but how will it evolve over the next decades until and after your retirement.  Long term history indicates that it will probably increase but with a lot of short term volatility.

I am in the same situation - putting money in at the full AA rate but my investments balances are pretty much staying static as they are losing money as fast as I’m putting it in.  I will stick to my guns. 

Thank you, i appreciate the feedback. My main concern was the short term (in 12 months) when i want to take as little of the 25% tax free as possible, but still around 10%. At that point i will be "locking in some losses" with a view to eating into it yearly going forward. Its just bad timing and misfortune. I don't think pension information is shared at the level it needs to be generally. I would estimate the majority of the population don't really understand that is a certain amount of gambling involved. 

If you need access to some of your tax free money in 12 months, I'm not sure why you are about to pay in £17k of your redundancy money to your pension. Can you not hold that money back to use in 12 months time, instead of taking tax free money out of your pension? 

I have no choice, it will be taxed at 40% if i don't !

Lifematters

Spivo46 said:

Audaxer said:

Spivo46 said:

Pat38493 said:

Someone once said “the stock markets reward the patient, and punish the rest”.

As Dunstoh said, when markets go down you are buying units at a “bargain” price.  The question is not what is your investment worth today but how will it evolve over the next decades until and after your retirement.  Long term history indicates that it will probably increase but with a lot of short term volatility.

I am in the same situation - putting money in at the full AA rate but my investments balances are pretty much staying static as they are losing money as fast as I’m putting it in.  I will stick to my guns. 

Thank you, i appreciate the feedback. My main concern was the short term (in 12 months) when i want to take as little of the 25% tax free as possible, but still around 10%. At that point i will be "locking in some losses" with a view to eating into it yearly going forward. Its just bad timing and misfortune. I don't think pension information is shared at the level it needs to be generally. I would estimate the majority of the population don't really understand that is a certain amount of gambling involved. 

If you need access to some of your tax free money in 12 months, I'm not sure why you are about to pay in £17k of your redundancy money to your pension. Can you not hold that money back to use in 12 months time, instead of taking tax free money out of your pension? 

I have no choice, it will be taxed at 40% if i don't !

Can you not put it in your pension as cash only if you will be accessing it in 12 months? 

sg1000

"why it makes sense"?  Your contributions are boosted by 20% if a basic rate tax payer.  40% if higher rate tax payer.  Whilst there could be a complete catastrophe that wipes out your contributions, I don't think it is highly likely.  I am saving loads in to an AVC plan as opposed to an ISA for this reason.