Are pensions affected by Stock Market crash

lanyroo

I have just down sized my job and was going to take my pension early to make up the shortfall.

Someone told me that my pension will not be worth as much now because of the economic situation at the moment.

Is this correct?

Is it wise to wait a few months? I can't wait too long as I will need the extra money to pay my mortgage etc.

Many thanks.

lanyroo

Mortgage_&_debt_free

If you have a final salary pension it won't make a difference.

If you have a money purchase (or AVC) scheme it will, as the funds your pension is invested in may have gone down (or up!) recently.

If you are near retirement age with a money purchase scheme and it has a "lifestyle" profile a significant proportion of the funds should be in lower risk assets.

Check with your pension scheme administrators, they will be able to answer your questions specifically.

HTH

Dithering_Dad

If you take your pension early to make up the shortfall in your earnings while you're working, how will you make up for the shortfall in your pension when you're retired?

Have you consulted an IFA to make sure that your pension in not dramatically reduced by taking it early?

lanyroo

I will only be taking my pension 3 1/2 years early, as I can take it at 60.

To be honest I didn't think of that but I want some quality of life now, to spend time with my elderly parents and spend time around the house and with friends etc.

I don't intend to retire until I am 65 as I think I will be able to manage 5 hours a day up til then (fingers crossed).

Do youo think there would be a large short fall?

zorber

i can not recommend taking your pension early, There are likely to be penalities in place if you do, Depending on your scheme depends on the penalities, mine i thionk its 20% penality then a sliding scale.

Check it out before you decide, you will be worse of in the long term by taking early retirement unless you have just had a windfall.

Retired_I.F.A.

To say one is penalised fo taking final salary scheme benefits early is wrong.
It's not a penalty its a reduction on that you would recieve had it been left invested till the normal retirement date.

Saying it's a penalty implies you do not get it's true value when in fact you may well be getting more as it all depends on the reduction factors in the scheme rules.