Pension - can I take the money out and stick it in a savings account?

[ColinP]

I'm pretty unimpressed with my pension performance since it was set up and was thinking I'd actually be better of moving it to a savings account for the time being - in fact I'm half tempted to stick it all into premium bonds for now!

Can I do this, or am I tied to moving to another pension provider? Not 100% sure on what I can and can't do with money I've stuck into my pension.

[cjanderson]

think its stuck there (unless maybe a work pension you only took out witin the year). you get tax relief on the pension payments so you can't get it until 50.

you can only move to another pension provider - or maybe an exciting SIPP which you manage yourself

:suspect: take professional pensions advice :suspect:

[ColinP]

think its stuck there (unless maybe a work pension you only took out witin the year). you get tax relief on the pension payments so you can't get it until 50.

you can only move to another pension provider - or maybe an exciting SIPP which you manage yourself

:suspect: take professional pensions advice :suspect:

That's as I suspected - given the tax relief aspect.

I'll probably leave it where it is for now in this case.

[Baz]

All pensions are crap at the moment.

And taking it out of equities is the worst thing you could do. Ask any IFA worth his salt and he will tell you that someone of your age should just ride it out. The time to take it out was in May or June, you missed the boat I'm afraid. Taking it out now is like selling your house at the bottom of the housing crash and waiting until they have risen again to rebuy at a higher price. The markets go up and down. In fact I have just upped my payments as when the markets are low you buy more units and those units you bought at the bottom are the ones that will grow the most when the market recovers.

Also, with inflation being quite high, and interest being low, your cash savings account will probably erode your capital away anyway.

[friedeggbutty]

I agree with what Baz says, moving out of equities now is closing the stable door after the horse has bolted.

However, if at some point in the future (after equities have hopefully recovered) you could investigate transferring your pension pot to another provider that allows you to hold some or all of it in cash if this gives you greater peace of mind.

I have a SIPP with Hargreaves Lansdown so I decide where I want the money to be invested. At the moment (due to paying all but the tax free £30k of my voluntary redundancy money into it earlier this year in order to claw back the 40% tax) I have 75% of it in cash. The variable interest rate they pay is far from the best available but it's also far from the worst. They also offer fixed rate terms from time to time so I currently have all but £10k of the cash in fixed rate deals of around 6%.

At present you can only take money out of the pension wrapper from the age of 50, and even then it's limited to a lump sum of 25% tax free with the rest being taken gradually in the form of a pension. From April 2010 the minimum age for accessing the pension goes up to 55.

[Flap]

In fact I have just upped my payments as when the markets are low you buy more units and those units you bought at the bottom are the ones that will grow the most when the market recovers.

.

Yip, I started investing more in my pension for those reasons.

[Baz]

Yip, I started investing more in my pension for those reasons.

Well since I upped mine they have lost 15% already. :lol:

Got to stick with it though.

[Flap]

Indeed.

I'm only 25. Who knows what it'll be like in 35 years' time - got to be better than right now (famous last words :p)

If it's all cyclical, and this year and next couple will be bad, in a few years' time, it should pick up - end of the day, who knows, but I'm gonna keep plugging money in, because a) it's savings, b) hope that the markets pick up c) investing while market is down is good in long term for the reasons baz posted above.