Pointless Pension Pot?

annandalex

Having decided to request my personal pension annual statement from L&G earlier than usual, I find my embarrassingly small pension pot has shrunk even further. It has lost almost £3,000 in just 8 months :eek: . My money has been invested in the 'managed fund' which is meant to mean moderate risk. As I am 52 and it matures when I am 60 I can't -

a) see it making up this money in this time frame (also taking into account the monthly payments I'll be making in the meantime)
b) be worth much at the end of the day anyway

So, I would like to know if anyone can tell me whether I am better to start receiving my pension now (after taking 25% tax free) or

Freeze it and therefore not give them anymore money to lose for me and to move what there is into a safer low risk fund.

Could anyone advise please? I'd be very grateful as searching for any meaningful advice on the Web isn't producing any worthwhile results. Thank-you.

dunstonh

It has lost almost £3,000 in just 8 months :eek:

Unless that amount is put in context with the value, it means nothing.

To expect your pension to grow every year is an incorrect assumption. They zig zag and last year was a zag, not a zig.

My money has been invested in the 'managed fund' which is meant to mean moderate risk.

It is medium risk and your loss isnt as big then as you seem to think it is as it is consistent with that risk profile. Actually its probably a tad less.

As I am 52 and it matures when I am 60 I can't -

a) see it making up this money in this time frame (also taking into account the monthly payments I'll be making in the meantime)
b) be worth much at the end of the day anyway

8 years is a long time. I can see it recovering quite easily.

So, I would like to know if anyone can tell me whether I am better to start receiving my pension now (after taking 25% tax free) or

What would be the point of that? You just end up taking money out at the worst time and reduce your future retirement benefits.

Could anyone advise please?

You need to see an IFA. Part of your problem is that you dont understand how investments work and you are talking about making decisions which are going to impact on your retirement and some of these decisions you can not undo if you find out later you made a mistake.

annandalex

Hi, sorry I should have said £3,000 out of £15,000 total. I'm sure you will say that is an acceptable loss - as did the Pensions Advisory Service on the phone today. However, to me it isn't and I'd like to prevent any further loss during the coming year either by freezing it and, as I said moving my investment to something safer or taking it now. I'm just not sure if either of those has any benefit over the other.

Leaving it until the end of the term, even if things improved dramatically I don't see around £50 month, less tax, going very far.

I have a phobia about IFAs I'm afraid (don't take it personally!) - from bad past experience and ... I presume they would also have their own charges for their 'professional' advice?

dunstonh

I should have said £3,000 out of £15,000 total. I'm sure you will say that is an acceptable loss - as did the Pensions Advisory Service on the phone today.

You are correct. It is an acceptable loss.

However, to me it isn't and I'd like to prevent any further loss during the coming year either by freezing it

You should be aiming to pay in when units are cheaper. That is the case now and freezing payments is the wrong action.

Leaving it until the end of the term, even if things improved dramatically I don't see around £50 month, less tax, going very far.

You are right, it wont. However, the basic state pension of £4700 per annum doesnt go very far either.

I have a phobia about IFAs I'm afraid (don't take it personally!) - from bad past experience and ... I presume they would also have their own charges for their 'professional' advice?

Your problem is one where you dont understand the issues so the costs of getting it wrong could be far higher than any cost of advice. Why not go back to the IFA that set it up (assuming it was an IFA and not a tied agent)?

tartanterra

dunstonh is bang on the money there.

You say it has shrunk by 3K, well that's the rollercoaster! Sometimes you're going up, and sometimes you're going down. However, as you are within 10 years of retirement, didn't you consider locking in gains during the good times?

cheggers

My standard life pension lost £5k this year, in effect I have now paid in more than what it is worth.

Robert_Sterling_3

Like it or not putting money into a pension scheme is a gamble.
Not putting money into a pension scheme is also a gamble.
So is getting married.
etc etc etc

annandalex

tartanterra wrote: »

didn't you consider locking in gains during the good times?

Could you explain what this entails - I've never heard of it before.

As an aside I don't think it's right that we're all expected to take out some sort of pension provision and companies are not required to notify us when things are going badly. Apart from asking for a statement from L&G there is no way for me to find out what is happening with my investment. No, it isn't available online - apparently my pension is one of the 'older types'.

dunstonh

I don't think it's right that we're all expected to take out some sort of pension provision and companies are not required to notify us when things are going badly.

things are not going badly. They are doing exactly what is expected.

Apart from asking for a statement from L&G there is no way for me to find out what is happening with my investment.

Ask your IFA.

No, it isn't available online - apparently my pension is one of the 'older types'.

L&G publish all their unit linked funds online

annandalex

OK everyone - thanks for your er ... support and advice. Great to know that you more experienced people out there are willing to give the little people a hand. You've been just great and made me feel so much better about the problem. What was the actual purpose of this forum? I must have got the wrong idea from somewhere.

Possetjohn

annandalex wrote: »

Could you explain what this entails - I've never heard of it before.

As an aside I don't think it's right that we're all expected to take out some sort of pension provision and companies are not required to notify us when things are going badly. Apart from asking for a statement from L&G there is no way for me to find out what is happening with my investment. No, it isn't available online - apparently my pension is one of the 'older types'.

Locking in gains or consilidating gains means moving assets to lower risk funds such as those based on cash. Normal advice is to do this gradually as you approach your intended retirement age.

It is easy to be wise in hindsight. If I had known how much the markets were going to drop I would probably have moved a large proportion into cash, and now would be thinking about moving it back into equity funds. Oh well, Ho hum!

Dunstonh is quite right. Any money you are investing now is buying units at a much lower price (more units for the same money) giving you a chance of better growth when markets recover which they will in an eight year time span. If they don't nothing really matters anyway! Now is not the time to consilidate your losses. You may as well hope the rollercoaster is going up again soon!