Why I’ll join the silver stampede to cash in a pension

At the beginning of the last decade, a young man who claimed to be my ‘premier banker’ paid me a visit. He was accompanied by his boss, evidently there to assess the junior’s performance. Once upon a time — at least in popular imagination — bank managers were kindly, cautious, long-term advisers, but by the turn of the new century they had become shameless product-pushers with targets to fill, and it was obvious from the body language of both visitors that this poor chap had to sell me something by the end of the call or his job was on the line. So I took his ‘advice’, signed for a stakeholder pension — and never saw either of them again. I’ve been making monthly contributions of £240 (grossed up by the taxman to £300) ever since, thereby accumulating a pot which now claims to be worth £60,000 and promises in due course to turn into a monthly pension, by way of an annuity, of £273.

That won’t pay the winter gas bill in a few years’ time, but the provider’s report tells me there has been lots of exciting switching of my money in and out of different collective funds, and that annual charges of £500 have been creamed off. Not a bad little earner for them, whoever they are, and a brief reprieve for that young banker before he was handed a black bin-bag. But apart from the tax break and the welcome discipline of regular saving, I’ve had a feeling all along that the deal is an absolute dog. So I shall almost certainly cash it in and use it as a holiday fund for my seventh decade, rather than watch inflation eat the monthly stipend to worthlessness in my eighth and (if I’m luckier in health than in investment choices) ninth and tenth.