Pension Drawdown in the current situation

[omniflow]

I suspect my position is not unique, so hopefully this will be of general interest.

I had a pension pot of a reasonable size, and I will confess to not having checked on the current value as I don't want to upset myself. I also have approx. £40K in a separate pension pot that is currently all in cash (ex Equitable Life). My plan WAS to transfer this into my main pot. However, now I am thinking that I might need to access this cash in the next few months as my work is drying up and so are my savings.

Obviously I'm aware that by taking this cash I am missing out on the opportunity to drip feed it into the market when things are at a low, and that in theory taking this cash out is effectively no different to taking £40K out of my main pot - it just feels better accessing the cash than selling funds that are low.

This is sort of aligned with my master plan, which was to work sporadically between 55 & 65, dipping into my pension as and when needed. It's just now I have a lot less say in the timing.

Are there any significant angles that I am overlooking, or should I just plan on extracting the £40K as and when I run out of cash?

[AndyAudi]

Hopefully someone more knowledgeable will comment but, I understand if you start drawing your pension it may restrict the ability to put more in going forward? If you are intending to keep working if possible not sure if this is a concern for you or not.

[omniflow]

AndyAudi said:

Hopefully someone more knowledgeable will comment but, I understand if you start drawing your pension it may restrict the ability to put more in going forward? If you are intending to keep working if possible not sure if this is a concern for you or not.

That ship has already sailed.....

Previously my pension pot had reached the lifetime limit, so I wasn't concerned about putting more money in.

I know that the sensible thing to do is to actually check what my pot is currently worth - but right now I think the very worst thing I could do is to start moving investments around, so I'd be happier not knowing.

[Robert-q32ja]

My view (what do I know?) is you should leave about 6-18 months of earmarked £ (for income etc) in no/low risk assets with any investment. Then you know the next year or so is taken care of. The balance is invested as you like. Need to remember to review/sell/rebalance every now and then.

If you have had £40k in cash since ELAs closed (2000) then the gains you would have made (even if you had left it with elas) would probably be much higher than the value cash would have produced even after C19 crash. Don't worry, I don't think this is what you have done.

So yes earmark the £40k for proposed income in next few months/year rather than sell assets that might have fallen in value, so they have a chance to recover.

Would also recommend you do look at value. FTSE100 is about 10% higher than is was 2 weeks ago, so we might be on the bottom left hand corner of the U recovery. Might not be as bad as you think. But again what do I know?

[PositronicRay]

There's those that don't know, and those that don't know they don't know.

I've always liked to keep year or two in ready cash.

[omniflow]

PositronicRay said:

There's those that don't know, and those that don't know they don't know.

I've always liked to keep year or two in ready cash.

I hadn't planned on needing the cash, and I still hope not to need it. Work has dried up for now, but I would hope it picks up again before use up all of my buffer. Currently I am just doing some thinking about what I will do if that does not happen.

Mind you - I also have a holiday booked in Italy in August / September - and my mindset is still that it's going ahead as planned...….