First pension at 30

grastgirl

You're right that the ISA doesn't lose money until you cash the investments in, but at no point since he took it out has he been able to cash it in for more than he originally put in. I think he put in £1000 about 8-10 years ago and it's still valued at ~£800. I understand that the investments go up and down in value, and the ISA is just the wrapper for them, but this sort of loss of value seems to show particularly poor performance.

Admittedly he probably hadn't done enough research, and there was less past performance information to go on anyway, but it's hard to see money apparently disappear.

kennyboy66_2

grastgirl wrote: »

You're right that the ISA doesn't lose money until you cash the investments in, but at no point since he took it out has he been able to cash it in for more than he originally put in. I think he put in £1000 about 8-10 years ago and it's still valued at ~£800. I understand that the investments go up and down in value, and the ISA is just the wrapper for them, but this sort of loss of value seems to show particularly poor performance.

Admittedly he probably hadn't done enough research, and there was less past performance information to go on anyway, but it's hard to see money apparently disappear.

Shares have performed poorly over the last decade, but that shouldn't sour you for the future. Over the long term (and you have almost 40 years to retirement) they are highly likely to perform better than property and bonds and almost certain to perform better than cash in a building society.

If part of the reason you are putting money in a ISA is perhaps for a house deposit then the appropriate place is a cash ISA.
If it is for long term (10 years), at least some (or most) of it should be in shares.

Your partner is unlucky in the timing of his investment, but it would generally be better to invest regularly (monthly) to help smooth out timing issues.

dunstonh

You're right that the ISA doesn't lose money until you cash the investments in, but at no point since he took it out has he been able to cash it in for more than he originally put in. I think he put in £1000 about 8-10 years ago and it's still valued at ~£800. I understand that the investments go up and down in value, and the ISA is just the wrapper for them, but this sort of loss of value seems to show particularly poor performance.

This has been one of the worst decades on records for UK stockmarket investments. Global investments have done better as well as other investments that are not stockmarket related. However, in the long run, this could end up being a very good decade for people to be buying investments

I think he put in £1000 about 8-10 years ago and it's still valued at ~£800.

Sounds like he put it 100% into equities before the the end of the last crash. About 2 years ago he would have had a nice profit. Then the global recession started and he would have taken a hit again. Last year though would have seen a strong gain. That zig zagging is quite normal (although we have had two major declines of 45% each in that period when its more normal to see one around 25-30%). Although nothing is really normal as its always unknown.

Equities are not the only investment. If he is 100% equity based then is it UK, N America, specialist, Far East, Emerging Markets? Why hasnt he got any fixed interest securities and property in there?

If you go 100% into any one area then you are going to be running more risk than spreading it around.

marklv

grastgirl wrote: »

I am starting a new job soon and have the opportunity to start a pension that I will be able to contribute to for a sensible amount of time (3.5 yrs). I'm pretty sure I'm going to go for it, but I just wanted to ask if there's any loopholes I should look for. The details:

Me:
30 yrs old, no pension to date other than basic state pension and S2P (neither of which I have enough years to qualify for yet)
£33000 pa (including £2700 London weighting), should I use £30300 for calcs?
Lower rate tax payer
Pension:
Employee contribution via salary sacrifice of 6.35% (£2095 pa?)
Employer contribution of 16% (£5280)
To USS (Universities Superannuation Scheme)
Linked to best years earnings, adjusted to allow for inflation
Giving me ~£1400 per year pension

If you need more info, just ask.

You're in a pretty good scheme as the employer contrubutes a decent amount. Join and stay.

grastgirl

kennyboy66 - Yes using cash ISA for a house deposit. I'm pretty sure when he invested he didn't have enough available to invest regular sums, so possibly it's performed worse due to exceptionally bad timing.

Dunstonh - I don't actually know exactly what the investment was, other than it being a stocks and shares ISA. I know even less about the composition of his current holding in that ISA, I'm not sure he does either to be honest. I would have thought it's a mixture, but with such a small investment, presumably the choices available may have been limited.

Marklv - Another vote for join is always welcome. I'll do my best to stay in it too, although according to a poster in another thread they may be changing the terms soon.

jh2009

Im back to rejoin this debate after a weekend away in wales.............

"Another vote for join is always welcome. I'll do my best to stay in it too, although according to a poster in another thread they may be changing the terms soon. "

I would join the scheme despite rumours of any changes.

Any change may only affect new staff, or more likely pension benefits earned after a future date when the change is implemented.

These changes are easy to talk about (and will be during the election i expect), but any change will involve a lot of debate/argument and be very hard to implement, and may even be heavilly delayed or never happen!

"I think he put in £1000 about 8-10 years ago and it's still valued at ~£800. "

If thats still invested id sit tight. The last decades been recognised as a bad decade for investments (although not all), which probably means this decade is a good time to invest. It may well come back in the next few years.

A general saying by someone called Warren Buffett (whose done quite well for himself!) is "invest when everyones scared, and sell when everyones happy"..... and id say as people are still a bit scared/traumatised now so maybe nows the time to buy! My own view (which i ought to add is not financial advice in case theres a crash next month!) is similar to dunstons in that i think its a great time to invest now if you have time (5 to 10 years) to give any investments that you may buy in a s and s ISA.