Pensions and Corona virus

[sunshineANDsweetpeas]

I currently pay a fair bit of money into a private pension to top up a decent pension I got in my 20/30s, think final salary.

I'm currently in my late 40s so this should hopefully give me a reasonable yearly income. But the amount I pay I'm really stretches me financially on a monthly basis and means I go without some luxuries (not all). With all this financial instability and stock markets having issues due to corona, should I be thinking if a different solution? ,

Should I be thinking of stopping the pension payments and putting the money somewhere a bit safer? I know an isa or savings account won't give me much back much due to interest rates being dropped, but I heard yesterday on the news that some pensions and investments lost 25% of their values due to the drop in the stock market recently.

I'll go and speak to a financial advisor at some point, I was just wondering what other people thought.

The point of pension investment is that it is long term!

You’re in your 40’s and pensions are long term investments. They take on the lows and the highs. Actually now is a good time to invest with stocks being so low. Your fund might take a hit but it will raise and make money over time. Of course, you need to speak to an actual advisor to discuss your personal circumstances but remember investments are a long game.

This part of the pension won't be long term due to my age. My final salary pension will be, but I'm not looking at doing anything with that. But this private one has only been running for a year now and I'll be paying in for a max of 15 years

@mumtobetolittleone that's a really good point re stick/shares being low at the moment. I hadn't thought of it like that

As a general rule, if you can afford to, put money into pensions when the market is low. I'm about to do this for our pensions before the end of the tax year. We are early forties, but don't expect to retire until 65.

Obviously speak to your IFA about this.

I pulled money from my 'backup# cash ISA to pay into my Pension. Lots of cheap and undervalued stock! It will bounce back, and with your investment timeframe, you may do well out of this

I'm about to top up my pension.

the interest rate has just crashed, and no savings account has met even the official figure of inflation for years. Let alone the real figure which is roughly double if you count fuel bills and insurance (which all of us pay) rather than frocks and hotel stays (which many of us do not)

stick with it.

I put X into my private pension

My employer puts Y into my pension for free

There is no other bank account that matches the free money given, if you are over 40

You’ve got to hold your nerve. I’ve lost about £15K off my private pension in a week but I’m still paying in. Buy low, expect recovery. I’ll admit to not being totally cool as a cucumber about it though!

I think pensions tend to move into more secure areas in the 5 years or so before you retire.

@waterbottle12 that’s called “life styling” in pension speak, and it isn’t automatic. All people in private pensions choose their own funds (if not directly, via an IFA) and for company schemes which are defined contribution it’s very common to be offered a fund choice, or at least state a risk level that you prefer.

Life styling makes sense if you’re going to buy an annuity when you retire - so you’re spending all - or a large part - of the fund in one go. But increasingly people are using drawdown - in which case, life styling choices can be different.

No-one should assume that their fund moves to a lower risk strategy - always check!!