Don't Let Panic Drive Your Financial Decisions

Sunday 24th May 2020

Don't Let Panic Drive Your Financial Decisions

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Article By Jan Bailey

Don't Let Panic Drive Your Financial Decisions

Every day we are confronted with the effects of situations and decisions that are beyond our control. At the moment, Coronavirus is dominating our news bulletins. Six months ago, everything was about Brexit. Later this year we’ll possibly be welcoming a new American President to our shores. Who knows what we’ll be facing in a year or two from now. Whatever happens, it’s true that to a large extent we won’t be able to do anything about it.

These major political and societal events have a significant effect on the stock markets. The Coronavirus pandemic is a case in point – we’ve seen huge volatility in the values of stocks and shares since the crisis began.

As an onlooker, and particularly If you’ve got investments or are saving for your pension, you may be feeling concerned about what these ups and downs mean for you and your financial worth. You may even be tempted to cash in any investments or draw down your pension in an effort to ‘get what you can, when you can’.

The Association of British Insurers (ABI) has recently expressed concern that those who are over 55 years of age may be particularly tempted to offset any immediate financial difficulties they are experiencing due to the pandemic by utilising pension freedoms granted by George Osborne, the then Chancellor, in 2015. Under these freedoms, over 55s can draw down all or some of their pensions savings as a lump sum (25% tax free). However, although the temptation to have the ready cash during current difficulties can be great, there is an obvious risk of cashing in savings that are intended to support you in retirement. There will almost certainly be better alternatives.

We understand that you may be worried about your investments and pensions, but we would urge you not to make any decisions that haven’t been carefully thought through and discussed with your financial adviser.

Lockdown won’t last forever and we hope that before too long the Coronavirus will be just a very unpleasant memory. However, the decisions you make now about your finances will have an impact on the rest of your life, including the plans you’ve made for your retirement and the security of your family.

Our Financial Advisers can help you to make the right decisions, based on your needs and aspirations now and for the future. Please do get in touch to find out more.

Source: https://news.sky.com/story/coronavirus-accessing-pension-pots-now-could-damage-your-future-over-55s-warned-11974338 )

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