Investor Views: "Should I Cash in My Final Salary Pension?"

Private investor Matthew Stevenson has recently rejigged his pension portfolio after being made redundant

Emma Simon 12 April, 2017 | 4:16PM

Matthew Stevenson, 58, decided to review his pension holdings after being made redundant last year. He says: “I’ve got an older final salary scheme from a previous employment. This is due to pay out a decent income, around £20,000 a year, from the age of 60.”

But the firm – an insurance company based in London – recently wrote to him to say they were increasing the ‘transfer value’ of this pension. He says: “The transfer value is now more than three quarters of a million pounds. This seems like a very significant sum of money, so I wondered whether it made sense to take this lump sum and invest it instead.”

This course of action appealed – especially considering his earnings have dropped dramatically. “I am currently doing some consultancy work, but my income is less that than it was at my previous employment,” Stevenson explained. “Getting access to this cash would be attractive, but I’m not sure it is the right thing to do long-term.”

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
First State Asian Growth I USD Acc51.18 USD-0.09
HSBC FTSE 100 Index Accumulation C2.07 GBP0.75
Invesco Corporate Bond UK Acc224.41 GBP0.26
Vanguard US Equity Index Acc552.00 GBP-1.07

About Author

Emma Simon

Emma Simon  is a financial journalist, specialising in investment and consumer issues, writing for Morningstar.co.uk

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