As I mentioned in a previous posting, the purpose of my recent trip to London was to get some help and advice about my teeny-weeny pension 'pot' thingies.
Georgie, bless her, has been a real star in keeping tabs on these pensions, writing to and phoning people at the various pension companies and contacting a local independent financial adviser lady (IFA) for help in sorting the whole caboodle out now that I've hit the geriatric age of soixante-cinq. Without Georgie's help I'd have been up poo creek without a paddle. As it is, like thousands of other baby-boomers, looks like I'm up poo creek anyway...
Over the last few weeks, Georgie and the IFA lady have been slaving away at digging out all the info necessary to reach the stage where decisions can finally be made about getting my hands on the dosh. The three of us got together for about an hour last Monday. During this meeting I suddenly realised how luck can hugely affect the amount of pension dosh one receives each month. That amount is dictated by, as I understand it, the state of the stock market at the time one chooses to 'activate' one's pension.
Typically, as luck would have it, come the time for me to activate my pensions, the stock market has bombed dramatically due to financiers getting jittery over an impending collapse of the euro as a result of Greece being hopelessly in debt and unable to honour its repayment agreements. Plus, of course, other factors largely associated with the balance of financial power gradually shifting east from west.
However, just as I was preparing to slit my wrists and leap head first out of the third floor window, the IFA lady explained that only about 45% of my pension pot is subject to the fluctuations of the financial markets; the other 55% being apparently immune (or whatever the official term may be) to the crazy actions and decisions of international finance nutters and insane politicians.
Then came the crunch question: what do you want to do about the unprotected 45%? - cash in now or wait for about five weeks (the length of time pension companies apparently allow for a decision to be made about 'activating') in the hope that the stock market improves...? OR... call the whole thing off and do it in a year or two's time, or perhaps longer, when you think the global finance markets might have risen from their current low?
At this point, I asked the IFA lady for advice about what she thought the stock market might do in the following days or weeks. After all, I understood her to be a financial adviser. Bless her, she replied in the only way possible: "I'm afraid I don't have a crystal ball." Hmm..., okay. I then signed various forms that allowed her to act on my behalf in dealing with the pension companies and said I'd phone her tomorrow about deciding whether or not to activate the pensions or, indeed, cancel the whole thing until a later date, perhaps years from now.
Spent that evening mulling over the question of what direction the UK stock market is likely to go in both the immediate and distant future. Daft question really, seeing as I know as much about stock markets as I do about nuclear physics, brain surgery, hip-hop music and the theory of relativity. However, a decision had to be made. And a quick one too. But the really worrying thing was that, even though Georgie and I are totally clueless about money markets, whatever decision we made would affect us for the rest of our lives. Scary. Really scary.
In the end I phoned the IFA lady that evening and told her to 'plug in' now rather than wait the stipulated five weeks, or maybe years. My thinking was that by the time the pensions in question were activated (about five days after giving the go-ahead), the stock market should have stabilised, and maybe risen, after crashing as a result of Greece's inability to pay back their full loan thingy. Also, I decided, guessed rather, that the stock market is unlikely to change much during the next five weeks, so it seemed pointless delaying a decision for that length of time and then getting excited or suicidal about every little stock market fluctuation between then and now. As my dad used to say "never be scared of making a decision, even though it's the wrong one." Fine in war maybe (he was military) but perhaps a bit rash in a situation about which you know nothing.
The other factor that influenced my decision to go-ahead now rather than later, was my utter and total conviction that the UK is doomed. For the life of me, I just can't see things improving. Certainly not over the next decade or, perhaps, ever. The whole country's in debt. So much so that it's become accepted as just the way things are. Bankers and financiers are overpaid money-grabbers without an ounce of guilt or feelings of responsibility to society. And as for politicians, well, most of them are equally obnoxious. Manufacturing's had its day and very little's being done to encourage new businesses or growth. Hate to say it but, as I told myself before I jumped the channel, the country's gone to the dogs.
Nah, try as I may, I can't see things improving. Which is why I made my decision to cash in now before things get worse. Hope I'm right. But, there again, I hope I'm wrong about the UK going into decline. Hah, time will tell.
Taking a pause
2 weeks ago