are characters # or & allowed in xml?

i have values with special chars that encoded to ascii in my xml. for example :

<?xml version="1.0" encoding="UTF-8"?>
<response>
    <name>&#381;irm&#363;n&#371;</name>
</response>

but when i parse value name i get only & as value. Is it allowed to use # or & in xml? or i have to use cdata necessarily?