Opting out of regular savings plans is not a bright idea

One of today's frequently asked questions, and normally preceded by the phrase: "I am disappointed" is: should I encash my regular savings plan? A more worrying question is: should I encash my regular savings plan and invest the proceeds into another plan which is bound to perform better?

The popularity of the question is rooted in the fact that few people will be showing a profit (at this point in time) on ten-year savings plans. Pensions, education plans, retirement policies, the whole universe of frequently funded investing will have been hit by the same forces which brought this year's Barclays Gilt Study to observe that ten years of savings into the S&P US market would have got you nowhere.