What should I do with my Pension? Is now a good time to invest? Should I sell my investments or buy more?
These are just some of the questions we’ve been helping our customers to answer. There is so much uncertainty at the moment, and not just for your money. We asked Hayley Millhouse, our Head of Advisory Services here at OpenMoney, to shed some light on our most frequently asked questions.
Is now a good time to invest?
With the markets in a dip, you might hear that it’s a good time to invest new money. While investing in a market downturn can offer the potential to make returns on your money when the market does pick back up, we don’t advise our customers to try and time the markets in this way.
This is particularly important in the current circumstances, when the outcome and timescales for economic recovery are so unpredictable. No one can say how long the markets will take to recover. If you are considering investing, thinking about your goals is a good starting point. Are you considering investing to help you achieve your medium to long-term goals, such as retirement, or because of what you’ve seen or heard in the press?
Investing money is a way to help you achieve your long-term financial goals and shouldn’t be thought of as a quick way to try and make some extra money and capitalise on what’s going on in the markets.
Here are three things we advise our customers to consider first before making a decision to invest:
- Are your debts manageable? We only recommend investing if you’re paying less than 15% of your salary each month to manage unsecured debts.
- Do you have a cash buffer to cover you in emergencies? We recommend you have at least 3 months outgoings to keep in accessible cash savings for an emergency. This is more important than ever, as many people’s incomes might be uncertain over the next few months.
- Are you happy to leave your money invested for at least 5 years? We only recommend investing if you’re happy to leave your money invested for at least 5 years. This helps you to ride out any short-term market fluctuations. This is particularly important now, as the next few years for the market are so hard to predict.
If you want to know whether investing is right for you, you can take our financial health check to find out and we’ll advise you on what’s best for you.
Should I sell my current investments?
We know that changes in the market can be unsettling at any time and particularly now, with the wider impact Coronavirus is having on our day-to-day lives. However, it’s important to remember that volatility is all part of the investing journey. It’s really important not to panic and make decisions led by emotion - although we know that’s easier said than done.
We all have an emotional attachments to our hard-earned money, and it can be worrying to see the value of our investments fall, but investing is for the medium to long-term, and we tell our investors to stay focused on their long-term goals throughout these periods of uncertainty.
If you have access to a financial adviser, we’d recommended speaking to them about your concerns before you sell down any investments you hold.
If you’re an OpenMoney customer, you can book an appointment with one of our advisers at no extra cost, through your OpenMoney online portal.
I am close to retiring – should I be worried about my Pension?
If you’re close to retiring, it could be a particularly scary time for your Pension. If you have a plan for retirement it’s a good time to review it – we always recommend reviewing your retirement plan on an annual basis, or when there have been any specific changes for your circumstances.
If turbulence in the markets have impacted your Pension and retirement plan, you might need to look at your options on how and when you take your retirement income. For example, is it necessary to take your tax-free cash right now? Do you have other savings you can take income from? Is there an opportunity to delay or phase retirement or take a part-time job for extra income? All of these options could give the markets opportunity and time to recover.
If you don’t have a plan yet, there is help out there for you:
- The government’s Pension Advisory Services offer a range of guidance and planning tools and they’re free to use
- Pension Wise offer free and impartial government guidance for over 50s on retirement options
- You can also speak to a financial adviser, although there may be additional cost associated with this
- We’ve partnered with GUIIDE , who offer a free tool to help you build a plan for your retirement and save money too
If you’re an investor with OpenMoney and you have any questions or just want to chat to our support or advice team for some support and reassurance, please reach out to us. Our team are ready to help:
- Email firstname.lastname@example.org
- Reach out through our webchat between 9am – 8pm on weekdays
- Call us on 0161 204 3200
- Book an appointment with one of our qualified financial advisers through your OpenMoney portal
We’re all in this for the long term and we’ll get through these challenging times together!