23 February 2016

How safe is your pension fund right now?

How is stock market volatility affecting its value?

For decades, the UK stock market was seen as the standard way to make a steady return. Right up until the mid 1990s (October 1987’s Black Monday notwithstanding).

Since then, however, it’s been a rollercoaster ride, to say the least. With falls that make Black Monday look like a grey Tuesday.

So if your pension is invested in it (in common with the vast majority of the British public), then it could be costing you thousands of pounds right now. Which could, of course, seriously affect your cumulative total when you come to retire.

Because early suggestions show that 2016 is shaping up to be a bad year for British pension holders. In fact, some pensions funds may actually be falling in value.

This is largely due to China’s internal economic struggles having a knock-on effect on the rest of the world.

The graph below shows how much the FTSE has changed since 1984. If you’ve been following recent performance, heart in mouth, worried about the possibility of the next tumble, then isn’t it worth considering less capricious ways to invest your money?


How safe is your pension fund right now?


Start reviewing your pension before March 2016

Last year, we saw some serious changes to the way pensions work here in the UK. The most notable of which is the right to draw your full pension fund from the age of 55 – with 25% being tax-free.

However, not all of the changes will benefit all of us. In fact, with the government keen to squeeze us for every last penny, it’s widely expected that further changes will be announced in the March 2016 budget. Changes that are unlikely to make pensions any more attractive.

Let’s look at two of the most detrimental revisions from the 2015 budget:

  • Reducing the maximum that can be held in pensions without being liable for tax
  • Slashing the amount that can be saved in a pension for those who pay the highest tax

These two changes alone ought to be enough to make you take stock. Are your pensions really working as hard as they can?

So if you’re:

  • Frustrated watching your fund constantly rise and fall with the markets
  • Unable to predict what it may or may not be worth in the future
  • Unsure whether or not it will provide you with the retirement income you need

Then you should be seriously considering alternatives.

As part of your pension review, you should find out how it’s been performing over the last few years. If you find it’s not growing at least 5% (and realistically, a good deal more than that), you should seriously think about transferring to a SIPP – a pension plan that puts you in full control.


Swap to a SIPP

A SIPP is a self-invested pension plan, which enables you to select and manage how your pension is invested.

A SIPP enables you to place your pension through more innovative investment vehicles, such as the peer-to-peer property lending platform, CapitalStackers.


Why should you invest your pension through CapitalStackers?

Because CapitalStackers is focused entirely on real estate. The people and businesses you lend to on this platform will only ever be experienced property investors or property developers – and your funds are secured on their property assets.

What’s more, far from being an alternative to bank finance, it actually enables developers and investors to work with the banks, building on their support, so that investors can lend directly to pre-vetted borrowers and create a mutually-beneficial solution.

Now, although investing with CapitalStackers isn’t without risk, it does make understanding risk clear and simple, with no-nonsense, straight talking presentations that give you all the information you need. And it gives you the means to monitor your investments. You can even choose your preferred management team, location, property type and level of risk. And, if necessary, you can choose to exit your investment through our marketplace.

Best of all, by investing through your pension fund you don’t have to pay tax on the interest your CapitalStackers investment generates.


Final thoughts

So, whatever your stage of life, you should seriously consider investing through CapitalStackers via a SIPP. Where else can you choose your own risk and reward, and earn a tax-free return of between 5% and 20%? Click here if you want to know more.


Don’t invest unless you’re prepared to lose all your money. This is a high risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong. Take 2 minutes to learn more.