A Mid Wales and Shropshire firm of Independent Financial Advisers and insurance brokers is warning investors that taking money from their pension pot now, when the market is depressed, could prove costly in the long run.

Chris Tombleson, an independent financial adviser at Rees Astley in Newtown, says:

“While it may be tempting to take money out of the market in the short term, it is highly likely to deliver lower overall returns.

“Any dramatic change to an investment stance in the current environment is likely to be costly and it may make sense to consider doing things gradually or waiting for more stability.

“It is too easy to become over influenced by market sentiment which makes decision making with long term consequences particularly difficult at times like this.

“Depending on what stage of retirement planning you are currently at, if time is on your side, the evidence shows that remaining invested for the long term is one of the best things you can do for your overall retirement wealth.”

Mr Tombleson advises investors to avoid putting all their eggs in one basket by diversifying their investment portfolio to protect against “adverse market conditions”

“The idea is that if one investment drops in value, the other investments will make up for it,” he explained. “It is one of the best ways to protect your investment portfolio from the many forms of risk.

“Diversification can’t guarantee that your investments won’t suffer during times of market volatility, but it can improve the chances of stability in the value of your investment.

“If an investor’s pension fund has been diminished due to recent market events, only time will help it recover and taking money from an already depressed investment reduces the potential for recovery in their portfolio.

“My advice is to be careful how much is taken out of the pot while it is still invested or consider reducing or suspending withdrawals.”

Mr Tombleson is encouraging investors who are concerned about their investments to seek advice from their independent financial adviser to find the right pension strategy for them. He can be contacted at Rees Astley on Tel: 01686 626616.

Rees Astley has offices in Newtown, Shrewsbury and Aberystwyth.