Pension Fund value falling...

confusedkim

This is my first question (of many, I expect). Please can you help:

I have 2 personal pensions which my ex-husband’s financial adviser set up (a Standard Life Stock Exchange Fund and a Zurich Equity AP Fund) which are obviously not doing too well in the current climate.
I am not sure how they accumulate value – does the provider buy shares with my monthly payment, like my monthly “stocks & shares ISA” (in which case it would be advantageous to increase monthly payments when the stock market is down as I am buying more shares)? If this is not how it works should I combine them and temporarily put them into a Cash SIPP until the stock market picks up again?
Sorry if this is a silly question

rich010273

Is it possible to find out how the 2 investments do work from your side?

As for whether cash is a safe bet now or not depends on your risk profile.

dunstonh

I am not sure how they accumulate value – does the provider buy shares with my monthly payment, like my monthly “stocks & shares ISA” (in which case it would be advantageous to increase monthly payments when the stock market is down as I am buying more shares)?

You buy units every month and the price of those units will be based on the underlying assets within the fund. If you have equity funds then whilst the capital value has dropped, the monthly contributions are now buying units much cheaper. When the markets go back up then it will be these cheaper units that make the most money.

Zig zagging is normal. I know the media is presenting it as scaremongering but any experienced investor will tell you that this is quite normal. The reasons vary every time but markets are volatile. In 2000/2001 we had techs and media and we saw a 43% market drop. This time round its banks and builders and have a 28% drop (from high point).

You can go back roughly every 5 years and find a major drop. The only difference nowadays is the media makes a big deal of it.

If this is not how it works should I combine them and temporarily put them into a Cash SIPP until the stock market picks up again?

If you put it in cash (which doesnt require a SIPP) and wait for the market to go back up then you would have missed out on the recovery and wouldnt have bought any units cheaper.

Zurich is cheap paid up but very expensive if you are still paying into it. You may wish to take get these reviewed.

confusedkim

Dunstonh,

Thank you for your clear and informative reply. You have set my mind at ease. As i have a few years till retirement (30+) I think I will stick with my current situation and ride it out.

thanks
x