Professional Investment Managers Views on Coronavirus

There is no denying that the Global Coronavirus pandemic has significantly impacted the global financial market. The UK share index (FTSE), for instance, declined by 16 percent over the week by March 12, and by 27.5 percent when you consider its performance in February 2020. Within the same time frame, the S&P also declined by 17.7 percent and 26.5 percent. These declines may be alarming to investors, so professional investment managers, including pension financial advisors are sharing their views and welcoming personal one-on-one consultations with their clients who may be concerned about their pension portfolios.

Knowing the views of professional investment managers and your pension financial advisor on the Coronavirus may provide you with some reassurance about the health of your finances. Notably, most financial experts believe that much of the media and the available market commentary on equity markets are associated with short-term movements in the market. Pension funds, however, are long-term investments, and despite the lack of a guarantee, history has proven that market volatility can improve over time and that the markets can recover invariably.

Your pension financial advisor will likely tell you that determined that a diversified portfolio can offer some protection and serve as a cushion against the impact of declining equity markets. That said, investment managers may recommend having a diversified portfolio that is tailored to your risk profile in the longer term. If you think that your risk profile evolved, get in touch with your financial advisor for a discussion. Long-term investors are encouraged to look at the bright side. Even if the virus brings the world economy to a recession, they are expecting economic activity to bounce back later, and additional factors could make it stronger.

Besides the Coronavirus, there are other factors that have impacted the markets around the world. These include US border closure to European flights except for the UK, and the oil price conflict between Russia and Saudi Arabia. The Coronavirus may be the underlying reason, but those factors led to more negative market sentiments these days. Professional investment managers expect the outbreak to affect consumer spending and industrial production.

Your pension financial advisor may offer some tips on how you can act and what you can do in times of uncertainty. Do not hesitate to get in touch with them for assistance.

Source URL: https://www.pensionexchange.co.uk/professional-investment-managers-views-on-coronavirus/

Cashing in a Pension – Is It the Right Choice for You?

You become eligible to access your pension funds when you are 55 years old. You also have the option of cashing in your pension to change it to a flexible or guaranteed income any time.

However, it may not be in your best interest to take as much as you please. There are certain parameters you must consider before you make that crucial decision to cash in your pension. Here’s what you need to think about:

• Taxes: A quarter of the pension pot is typically tax-free, and income tax is applicable on the rest. The income tax to be paid will be based on your overall income, where you live, and your personal circumstances. It makes sense to learn about taxes, how they affect your pension, and what you are likely to pay before cashing in your pension.
• Withdrawal risks: You may pay more if the withdrawal that is added to other income in the same year will result in a higher income tax rate. You might pay less by spreading out the cash withdrawals over several years.
• The urgency for money: Why do you want to cash in your pension? If you really need cash, take only what you need. Remember that the more you take today, the less you will have later on. Moreover, if you exceed the tax-free limit, you will have to deal with income tax for the rest of it.
• State benefits: Cashing in your pension could affect your state benefits, so be sure to check.
• The possibility of restricted payments: there is a limit on the amount of gross contributions that an individual can pay each year and benefit fully from tax relief. This can be an issue if you are still earning and you have other pensions to pay into.

If you are still unsure about cashing in your pension, consult with a qualified financial adviser, preferably experienced practitioners who follow the Pension Transfer Gold Standard. That way, you can be sure that you are receiving credible financial advice from someone who is regulated by the Financial Conduct Authority in the UK.

Some Useful Tips to Consider Before Cashing in Your Pension

Transferring your final salary pension is an option that many companies offer to their employees to save money on future pay-outs. Employees or former employees who participate or have participated in their pension plan are given the opportunity to withdraw their money as a lump sum as they leave the organisation or perhaps long after they have left. In exchange, people who choose to cash in their final salary pension forgo their right to a guaranteed income for life. While cashing in your pension may seem an attractive option as you’ll be getting your pension savings as a lump sum, there are certain things that you should consider before jumping in and giving up your retirement income.

One of the main things you should think about when considering cashing in your pension is your retirement needs. Annuity guarantees your monthly income throughout retirement. However, a lump sum which is based on your earnings at the company gives you immediate and complete control of your money so you can invest it the way you see fit. Consider the pros and cons of both when thinking about cashing in your pension, because while a lump sum might give you great prospects for investment a guaranteed income during retirement is useful so you can cover your retirement expenses (e.g. cost of living, utilities, medical needs, etc.). Compare your guaranteed monthly income with your projected monthly expenses so you can decide whether or not it makes more sense to withdraw your pension now or later.