If the end of the world is really nigh, should I be investing in shorter-term savings schemes rather than a pension? I currently contribute 20% of my £117,000 salary to my pension and my employer pays 5%. I’m 44 and worry about imminent world wars over dwindling resources. I find it hard to believe a peaceful 20-year retirement beckons. Is there a way to invest in things I could access quickly if the poop really does hit the fan?
LW, Derbyshire
I sincerely hope your fears prove unfounded, but apocalyptic predictions will be prompting many to ask the same question. However, decisions around pension savings should not be taken lightly. I consulted Helen Morrissey, head of retirement analysis at Hargreaves Lansdown. She points out that your pension is not necessarily locked away until you reach state pension age and you can access a private pension pot at 55. The age limit rises to 57 in 2028, which means you could have your hands on your money in 13 years.
Otherwise, she recommends stocks and shares Isas. You won’t get the tax relief provided by pension contributions, or the money your employer puts in, but any income you take will be tax-free. Cash Isas can also be accessed in an emergency. You aren’t exposed to the stock market, which could be a good thing if Armageddon looms, but means you don’t get investment returns during buoyant times.
Savings accounts can offer the easiest access in an emergency but shop around for the best rates. All have pros and cons, so it’s worth spreading your money across several to maximise potential benefits.
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