Pension Funds

Bustrbroke02

I want to pay a lump sum to my private pension of £48k before the end of the tax year.

I understand the ups and downs of fund values etc, but if I’m going to make a payment right now, is it good to put this into a stocks and shares based fund or is it better to put to a cash fund and maybe transfer later?

Has the impact of recent events already happened meaning it’s a good time to pay in? Or is my momey likely to reduce initially?

I can’t hang on any longer as I need the tax benefit.

Any info or opinions will be much appreciated.

Isthisforreal99

For those questions a crystal ball is needed and people would only be guessing.

Main thing is get the money in, even if cash, then you can worry about funds later.

Does your income and any existing contributions give you the headroom in terms of tax relief and annual allowance?

Albermarle

is it good to put this into a stocks and shares based fund or is it better to put to a cash fund and maybe transfer later?

Has the impact of recent events already happened meaning it’s a good time to pay in? Or is my momey likely to reduce initially?

Nobody can give you an answer to those questions, as it is not possible to see into the future.

Why not do half and half, and hedge your bets.

Exodi

Bustrbroke02

I can’t hang on any longer as I need the tax benefit.

You could put the money in, but just not invest it yet if you're undecided.

As to what the market will do in the near future, if we knew that, we'd be millionaires.

FWIW, remember that when people sit back and longingly look at a stock chart and point to the bit where it dips and say "I wish I invested there" then point to the bit where it tops out and say "and sold then" that 'there' would have been a period with significant turmoil and uncertainty, whereas 'then' would have been a period where everything is right with the world.

Yet ironically, whenever stock prices drop and there is turmoil in the world, many investors don't want to invest… they'd rather wait until the price goes back up! We see it all the time. It is emotional, not logical.

Personally, while I never try timing the market (I always just put money in as soon as I'm able to, I'm not about speculating) but if I did, I would say now should be seen as a better time to invest than when the market is at ATH's, you're getting a ~5% discount from last month, you could see it as quite lucky when paying in a lump sum (though hopefully Trump doesn't declare WWIII and drive stocks down further - you never know with him!).

vacheron

Each time I have had a lump sum to invest I have drip fed it slowly over a number of months. Sometimes 6, sometimes up to 36 months.

In hindsight, on every occasion I would have done better if I had just dumped it all in at once, but this method helps me sleep at night! 🙂

artyboy

I'll ask the obvious question to the OP - do you have both enough relevant income, and Annual Allowance, to make such a payment?

£48k is a neat round number to gross up to £60k with BR relief, so the presumption would be that they have made no other contributions this year (or have carry forward that can be used because of relevant income headroom this year…)

DRS1

https://forums.moneysavingexpert.com/discussion/comment/81937398#Comment_81937398

and by relevant income he means taxable earnings from employment or profits from self employment.