Eeek - Just got annual pension fund statement through

grey_lady

I just received my annual pension statement from Standard life for my stakeholder pension (pn s7). Half of which is invested in their UK stockmarket fund and the half in their Ethical fund which is also UK based.

My pension overall is worth 21% less than it was a year ago, and i seem to remember it dropping last year as well.

Although long-term my funds dont seem to have done to badly, in the past 3 years I dont think they've done as well as the industry average? and Im starting to get worried although i have 25 years to go before retirement.

Can anyone tell me if this is average given the drop with the stockmarket, general economical problems etc or if I should be looking to move to a different provider.

dunstonh

My pension overall is worth 21% less than it was a year ago

Thats pretty good for a fund selection that is 100% equity.

Can anyone tell me if this is average given the drop with the stockmarket, general economical problems etc or if I should be looking to move to a different provider.

The pension provider is just an administrator. Its the funds you select that give investment returns. Whilst you havea stakeholder, you have a limited selection of funds but you only are using two of these and have 100% equity exposure. So, you should expect to follow more closely the ups and downs than if you had a more diverse selection.

Changing provider and staying 100% equity isnt going to have much impact on the returns and it could be worse.

With 25 years to go until retirement, you will see many more periods of major losses. There have been around 10 periods that have had losses of 10% or more since 1986. Nearly one every two years on average. You take the ups and the downs and average it out and with 25 years to go, periods like this are great news for you as you are buying your units so much cheaper.

grey_lady

Thank-you!

bendix

If I had a 100% equity linked pension which had only lost 21% in the last year and I had 25 years to retirement I'd be doing two things:

1) rejoicing that it wasnt a lot worse, and

2) chucking every spare penny I had in there right now to reduce tax and buy the units when they are ridiculously cheap.

Make this market work for you . .

georgehere

.... just realised (must pay attention next time around) my pension is based on a FTSE tracker which is tracking the FTSE very well indeed. Graph looks like the fun part of a rollercoaster ride.:eek:

I am still trying to work out how badly off I am - the units I purchased a while back have dropped a lot ... but the more recent ones were purchsed lower so haven't fallen so far!!! that must make the weighted average reduction less than it first appears (I think).

rb621

My statement came today too and in the last 12 months it has dropped in value by 23%. I have increased my contributions for now as being self employed it is a bit more tax effective. I'm also doing so while I still have employment as I'm expecting at some point this year I will join the unemployed and my pension contributions will stop for a while.

I still have 25 years to go before retirement so we are just in a dip now (ok a deep one). I expect there will be 3 or 4 more recessions between now and retirement. As I get older I'll move some of the pension pot out of shares and into less risky investments to lock in any gains.

Just have to time it right and lock in gains at or near the top.

Richard.

dunstonh

I have increased my contributions for now as being self employed it is a bit more tax effective.

And of course you get lower state pensions being self employed so you have to play catch up.

I still have 25 years to go before retirement so we are just in a dip now (ok a deep one). I expect there will be 3 or 4 more recessions between now and retirement. As I get older I'll move some of the pension pot out of shares and into less risky investments to lock in any gains.

Exactly right.

Just have to time it right and lock in gains at or near the top.

Easier said then done. Trying to time the markets can actually see you lose more money. e.g. going into markets when they are not at their lowest and coming out when they are not at their highest. However, diversification, downside protection (e.g. not going 100% into equities) and rebalancing can help a lot.

I'm expecting at some point this year I will join the unemployed and my pension contributions will stop for a while.

good luck with that and lets hope it doesnt happen.