Should I Sell My Pension?

By Author: Peter Philip
Total Articles: 35
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Due to recent economical problems it is likely that the value of your savings will decrease over time. Because of low interest rates on your savings and increasing inflation, your pension fund will be worth less when you retire and begin receiving the money. The official statement from the World Pensions Council (WPC) explains: ‘without returns that outstrip inflation, pension investors face the real value of their savings declining rather than ratcheting up over the next few years’.

Similarly, and due to the instability of our economy, annuity rates have fallen and pension payouts from pension companies have plummeted. Britannic Assurance, a pension business, is the worst case of decreases in payouts; they were also fined £525,000 in the 90s for falsely advertising their schemes.

If you need any more convincing of these businesses’ instability consider the following figures from Britannic and why Sylvia Morris from thisismoney.com has dubbed them the ‘worst-performing fund’. Britannic delivered a payout of £73,612 for someone who has saved £200 a month for 20 years. This buys an annual income of just ...
... £3,861 for a 65-year-old man retiring today. However, someone saving the same amount over 20 years in 2007 would have received a payout of £142,884, buying an annual income of £8,786. That is a 56% pension cut in only 5 years! So perhaps it would be smarter to simply take care of your own savings.

Furthermore, the rise in retirement age is not going to stop anytime soon. It is estimated that the retirement age for students currently studying their A Levels is likely to be around 77 years. This means that they may find themselves contributing thousands of pounds into their pension scheme and never have time to spend it. The best way to make the most of your pension is to look into a sell my pension scheme. These are great as you can receive almost your entire pension in a tax-free lump sum, meaning you will not lose money due to further inflation in the future and you will improve your cash flow.

Receiving a lump sum of thousands of pounds will mean you can afford to do something you always wanted to. For example, travelling is one of the things people regret not doing the most. However, when you're retiring at nearly 80 years old travelling is not going to be possible and you'll curse yourself saying, 'why didn't I sell my pension then?'. Why not release your pension now, when you know how much it is worth at current prices, and use it to enjoy your youth?

Alternatively, what is to say that a pension scheme is the most profitable place to keep your money? You could use your lump sum to invest in other businesses and make more money than you ever earned. Or simply use it for saving bonds and other high interest accounts; this way the money is available whenever you need it.