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
Facebook Twitter LinkedIn

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.”

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

Facebook Twitter LinkedIn

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
FSSA Asian Growth I USD Acc64.05 USD-0.52Rating
HSBC FTSE 100 Index Accumulation C2.49 GBP-1.06Rating
Invesco Corporate Bond UK Acc223.45 GBP-0.16Rating
Vanguard U.S. Eq Idx £ Acc739.76 GBP0.32Rating

About Author

Emma Simon

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