Pensions

[djprescott]

Is 56 years of age too old to start paying into a new pension. I have took a lump sum from my existing pension and looking to invest further.

[Sylday]

It depends when you intend to retire. It might not be worth it, if you're going to retire at 60; but might be if you work until you're 65 or older. But you'll certainly need to shop around, and carefull consider the merits of each pension plan you're offered. (Can't help but think that you should have thought about this before you drew the lump sum out of your existing pension.)

[djprescott]

Thanks for the advice. Just to clarify, the lump sum was drawn down to invest into the company of which I am a director. I have now 'retired' as director and the money loaned to the company is being repaid to me, hence the question of where to invest. I will be retiring officially at 65. Incidently the company will also be paying on a consultancy basis.

[Sylday]

Thanks for the clarification. Given that you don't intend retiring for another 9 or 10 years, because of tax concessions there could be advantages in investing your repaid loan in a pension scheme, as compared with investing in the equity market. But of course any investment involving the ewquity market might suffer if equities perform as feebly over the next 10 years as in recent years. Also, please note that there are certain restrictions on paying into a personal pension if you are also in an occupational pension scheme. By the way, a useful simple guide to pensions is at http://www.is4profit.com/is4money/pensions/index.htm

[djprescott]

Thanks for the concise reply. But presumably if equity markets suffer then pensions will too as they are heavily invested in equities. Are you saying that the tax concessions would tend to cushion against a downturn in the equity market.