Pension or Isa

MarkGaryG

With only 2 years to retirement and my pension loosing money, should I take my tax free lump sum and put it in to an isa? 

Marcon

MarkGaryG said:

With only 2 years to retirement and my pension loosing money, should I take my tax free lump sum and put it in to an isa? 

Your pension isn't losing money; the underlying investments are. Why not change those, rather than moving the funds to an ISA?

MarkGaryG

The pension is managed by a Broker. I thought pensions and similar investments were generaly loosing at the moment due to world affairs. But with two years to retirement, I doubt my pension investments will recover in time. So moving part of it to an isa now looks a good option? 

Marcon

MarkGaryG said:

The pension is managed by a Broker. I thought pensions and similar investments were generaly loosing at the moment due to world affairs. But with two years to retirement, I doubt my pension investments will recover in time. So moving part of it to an isa now looks a good option? 

Not necessarily. Pensions and ISAs are both tax wrappers rather than actual investments - it's where your underlying funds are invested that needs to be considered. Maybe talking to the broker managing your pension might be a good first step - or possibly an independent financial adviser?

MallyGirl

MarkGaryG said:

The pension is managed by a Broker. I thought pensions and similar investments were generaly loosing at the moment due to world affairs. But with two years to retirement, I doubt my pension investments will recover in time. So moving part of it to an isa now looks a good option? 

unless you plan to buy an annuity one would hope to live a long retired life giving plenty of time for investments to recover. ISAs can be cash or stocks & shares. Within a pension you can invest in stocks & shares or cash like options such as money market funds. Either way you need to make choices or trust the person you have appointed to run it for you

dunstonh

With only 2 years to retirement and my pension loosing money, should I take my tax free lump sum and put it in to an isa? 

Pensions and ISAs share the same investment options.  So, taking it out of the more tax efficient wrapper (pension) to put into the less tax efficient wrapper (ISA) would not achieve anything.

. I thought pensions and similar investments were generaly loosing at the moment due to world affairs. 

Investments had a bad period in 2022 but 2023 has been relatively stable (largely breakeven to small increases depending on your investment risk).  The low point was October 2022.

 But with two years to retirement, I doubt my pension investments will recover in time

If you are going to sell all the investments in 2022 to buy an annuity, then you don't have to worry about recovery as annuity rates have gone by broadly the same ratio as the investments fell. So, you are not worse off.   If you are going to enter drawdown instead of an annuity, then you would not be selling the investments in two years and will be holding them for another 25-40 years.

 So moving part of it to an isa now looks a good option? 

Nothing you have said so far suggests that is a good idea.