How to get the cash out of your Pension

snow hope · Post by **snow hope** » 06 Apr 2009, 23:18

That makes a lot of sense PaulS.

I am thinking of transferring my little pension pot from Corporate Bonds into Index Linked Gilts - these are supposed to mitigate inflation by increasing by RPI approximately.

Does anyone have any views on this course of action, as it is hard to get sensible advise from IFAs who believe in BAU.....

SunnyJim · Post by **SunnyJim** » 07 Apr 2009, 07:07

Hi Snow. That is what the BoE pension scheme has done for what it's worth! Of course they may be BAU in your eyes, but if they expect inflation....

BoE's Gilty Secret

snow hope · Post by **snow hope** » 07 Apr 2009, 08:48

Hey Jim - thanks for the reply - that is where I got the idea from!

emordnilap · Post by **emordnilap** » 07 Apr 2009, 16:18

I'm due to see my financial 'advisor' soon; Irish options are different to English ones but I'll let you know what gets decided.

Index-linked gilts is on the agenda.

I think financial managers should charge according to how well they do - both positively and negatively. My man would owe me under that type of law.

PaulS · Post by **PaulS** » 07 Apr 2009, 16:36

Just a word of caution: Governments can go bankrupt, too. Index linked gilts could become unlinked if hyperinflation hits us ('At these extraordinary times it is simply no longer possible to honour these extravagant promises made by our predecessors in government...'). You may get your investment repaid but in a inflated currency, worth much less than you put in.

However, a field, a workshop or a wind turbine will earn something for you in any possible future scenario, short of a complete breakdown of law and order.

emordnilap · Post by **emordnilap** » 07 Apr 2009, 16:55

PaulS wrote:You may get your investment repaid but in a inflated currency, worth much less than you put in.

About eighteen months ago, I saw this financial manager and he said that I was lucky, my fund had held its own. That's disappointing enough, innit? All those years of paying in and still worth the same (minus inflation).

So now the fund has dropped in value by exactly a third, anything seems like a good alternative.

emordnilap · Post by **emordnilap** » 08 Apr 2009, 17:14

My 'advisor' seems like the eternal optimist.

He insists the markets are going to come back - 'they always do'. That what he said eighteen months ago.

He said, "You're buying units at rock bottom prices with all new contributions" and went on to mention several companies including Bank of Ireland.

I said, "But if Bank of Ireland go, then it doesn't matter how cheap the units are (were)."

For a breathing space I simply told him to re-direct contributions to cash. Piddling interest I know but at least the money is still there. I have to investigate further.

RenewableCandy · Post by **RenewableCandy** » 08 Apr 2009, 17:44

emordnilap wrote:My 'advisor' seems like the eternal optimist.

Now why am I totally gobsmacked

?

Post by **kenneal - lagger** » 09 Apr 2009, 02:38

emordnilap wrote:My 'advisor' seems like the eternal optimist.

All salesmen have to be or they won't make any money.

I've just noticed that oil has dropped below $50 again. You could ask him what that signifies.

DominicJ · Post by **DominicJ** » 09 Apr 2009, 08:18

Something like 85% of all fund managers are beaten by the FTSE100 tracker.
To be fair, the government has pretty much taken over pension administration now, but most traders are still completely useless, having absolutly no idea what the companies they buy and sell actualy do.

emordnilap · Post by **emordnilap** » 11 Apr 2009, 16:47

Aren't women with bad feet supposed to be better at forecasting economic trends? Remember the phrase, "hell hath no fury like a woman's corns" or something like that?

RenewableCandy · Post by **RenewableCandy** » 13 Apr 2009, 22:31

Noooo! The corny puns are back!!

WolfattheDoor · Post by **WolfattheDoor** » 28 Apr 2009, 09:57

I've decided to try and release some of my pension this year. I was 50 last November so I am eligible to access it but after next year I would have to wait to 55, and in these days, 5 years is a long time.

Fortunately I stopped paying into the pension some years back so I only have £30,000 in it - hardly enough to provide enough to live on. I am thinking of getting a 25% lump sum out now and getting an annuity from the rest. I won't get much of an annuity but I wouldn't get much of a pension either so I may as well use it now while society still exists.

snow hope · Post by **snow hope** » 28 Apr 2009, 14:32

Sounds sensible to me Wolf - a bird in the hand is worth two in the bush!

PaulS · Post by **PaulS** » 29 Apr 2009, 10:07

WolfattheDoor wrote:I've decided to try and release some of my pension this year. I was 50 last November so I am eligible to access it but after next year I would have to wait to 55, and in these days, 5 years is a long time.

I have done the same with my SERPS, but I have chosen a much lower level of payment in exchange for inflation protection. However, I am not sure I have done the right thing.

I expect severe inflation at some point, which would quickly reduce my little pension to almost nothing, so having it RPI linked seemed sensible.

However, my pension is paid by an insurance company. Just like any other private firm, it can go bankrupt, so I may not get my inflation protection after all. Perhaps I should have extracted as much cash upfront as possible to minimise the loses when the pension stops paying.

Its a general problem and the solution depends I think on how quickly inflation takes off and how soon the insurance company goes bust.