No doubt you have been watching the recent roller-coaster of share prices with trepidation, especially if you have a pension fund still invested. The good news is that if you are younger than 50, stockmarkets should have recovered long before you retire. If you are older, hopefully you have been switching into less risky areas over time, like cash, possibly via so-called lifestyle pensions, which gradually shift investments out of equities into safer areas as retirement approaches.
The more difficult decisions face those whose pension fund portfolios were risky in the run-up to retirement, and who could be sitting on losses in value, possibly significant. You could work longer if this is the case or delay taking your pension annuity, perhaps by switching it into an income drawdown scheme, which allows investments to continue until the market hopefully bounces back again.
If you are approaching retirement and are satisfied withe size of your pension fund it might make sense to buy a pension annuity soon, which guarantees a fixed pension income throughout your retirement. Pension annuity rates have risen marginally over the past year, but could well fall back as interest rates decline.
As always, follow the golden rule; take advice when planning your retirement and buying your annuity.
