Pension contributions in Coronavirus times

[oldfatandtired1]

Hesitated in posting this as I know many people are suffering in so many ways at the moment - I am fortunate that I am continuing to work (from home and on full pay), and apart from being a bit fed up with not seeing anyone (I live alone, divorced and grown up sons living away) am coping OK with lockdown.

I own my own little cottage, mortgage free, and have some savings. A few months ago I decided to raise my pension contributions to 15% of salary - my employers pay 10%. I earn 32k a year. Obviously the markets are in free fall at the moment and my pension pot has gone down. So - do I continue with my higher contributions at the moment or reduce them to (the minimum) of 5% and put more into savings? (Although interest rates down there too)!

I’ll be 60 this year and intend to work until state retirement age as I enjoy my job and like my colleagues. I’m in good health and although nobody can predict the future my industry is unlikely to suffer post Covid 19, if anything we’ll be busier.

I know I’m lucky that I can support myself well on my salary - if I was younger (and could afford it) I’d probably continue with the higher contributions as the markets will recover eventually.

if you can afford it and are confident you won't need the extra cash in accessible savings in a few months time, then put as much as you can into your pension pot now. best to dribble it in month by month rather than a big lump sum as we don't know exactly when things will turn around, but they definitely will turn around and overall the markets will massively improve from the current position over the next 10+ years so every penny invested now will show significant growth. obviously for most people they can't afford to take advantage of this opportunity as they need all their funds for current survival but if you can afford it then go for it.

Ex Financial Services here (Not a Fat Cat Banker though). Savings (bank accounts) are at present a waste of your hard earned money. As long as you are looking at more than 5 years, money invested in a broad spectrum of investments should see a better return. It's actually a good time to invest in equities at the moment as they are cheaper than they were 2 months ago. Let your pension provider work for you.

Thanks both, good to get informed opinion! I’ll continue with the higher monthly contributions.

When the market is low, continuous investment means you pick up assets cheaply. So now is not the time to stop investing. Markets may fall further before they recover, but over the long term, the advice is still sound.