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Emergency guide for pensions

Torquil Clark is issuing emergency guidance for pension investors following the market turmoil created by the terrorist attacks on the US.

It says pension investors are right to be worried and has issued advice for clients coming up to retirement.

TQ says it is imperative for those retiring now to shop around in the open market if they are buying an annuity immediately.

It also suggests that selling investments to buy an annuity after market falls is not an attractive proposition. If investors can find a way of deferring converting their pension fund into an annuity, this may well make sense.

The IFA also says, if at all possible, individuals should be putting more money into their pensions but using a cash fund rather than any risk-based fund such as UK equity.

For investors retiring in two years time, TQ recommends monitoring funds carefully. They should be aiming to identify opportunities when equity prices recover which enable them to move the value of their pension away from equity-based funds towards cash.

Investors with 10 or more years to retirement should view recent market falls as a buying opportunity as units are cheaper. But they should not put money in as a lump sum, as the bottom of the market may not have been reached.

Pensions development manager Tom McPhail says: “The short-term message is do not buy or sell in haste. Market turbulence will continue at least for a couple of weeks. For those about to retire, it would be a good idea to investigate if they can delay this by any means.”

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