SERPS pension losses

dunstonh

Here we now have the OP defending himself against accusations by posters who spend large amounts of time improving their own lots or pots in the financial services arena one way or the other, who think everyone should have been reviewing their "investments" constantly for the last 25 years to make sure they hadn't inadvertently ended up any blind alleys being ripped off.

Stop being a hindrance. Every thread you post on is anti financial services even when financial services has nothing to do with it. You help no-one with such an approach.

Sterlingtimes

What is the opposite of "lazy investor"? Is it "busy investor"?

From recent press articles, we seem to have a concept of "lazy fund manager". The lazy fund manager charges a huge fee for being a busy fund manager, but does no more than track the market.

Perhaps, it is a bit of an insult for professions to call us lazy investors when we select a plausible fund of average risk and run with it.

For my part I did very well (as a lazy investor) in contracting out of SERPS. It has move to do with luck than the relative activity of the investor.

dunstonh

From recent press articles, we seem to have a concept of "lazy fund manager". The lazy fund manager charges a huge fee for being a busy fund manager, but does no more than track the market.

They are known as passive managed and are typically the type of fund that should be avoided. Typically in obsolete contracts, often from closed down insurance companies.

Perhaps, it is a bit of an insult for professions to call us lazy investors when we select a plausible fund of average risk and run with it.

Or perhaps its factual as you are a lazy investor. If you are not paying someone to run your investments or you are not doing it yourself then you are a lazy investor.

2sides2everystory

A hindrance to what?

So the financial services industry has nothing to do with SERPS policies failing to perform and nothing to do with the OP being worse off having followed financial services industry advice to let them manage the contributions that would otherwise have yielded his S2P in satisfactory manner instead of leaving him short?

Will you please stop being a hindrance to true understanding, dunstonh?

The truth was quoted by the OP several posts ago:

I opted out of SERPS 1987-1994 intially based on government hype, publicity and incentives in 1987.
It later turned out the government and insurance companies had made a !!!! up in their projections for people in my age group (male born 1946) I acted promptly on the new advice and opted back into SERPS in 1994.

And now we even have contributors spouting stuff like

It's (revewing your own investments with the hindsight of the pits of the last 25 years) about taking responsibility for yourself. Isn't that what being a grown-up is all about? (my italics)

That silly person probably does not even know who Sid is. Talk about wet behind the ears ...

I am anti the entire UK financial services industry because I know not a single player in it that does any consistent good. You are about as good as it gets dunstonh and I am afraid even that no longer comes close in my book to what it should be. As regards long term insurance business and pensions, the entire industry is now unfit for purpose and the responsibility and funds should be taken away from them and placed in the hands of a nationalised government pension office.

Meantime I grant that you have given the OP some options for making the best of a bad job, but that he should have to DIY in this manner makes mockery of the licensed pension providers with whom our funds are generally locked up and dwindling. Fund performance is abysmal everywhere you turn. Funds for UK pensions are supposedly reported in Sterling after adjustment for foreign investments, but no-one asks why pensions have barely made single figure Sterling advances during the period that Sterling has devalued 20% against the Euro. Is that because pension funds have been investing in just UK and US equities?? No I do not think so judging from the £3/4M bonuses falling into the laps of 25 year olds working in emerging markets who cannot believe their luck. What fueled their investment performance bonuses? Money from their own pockets? Skill? Neither. It was our funds.

All rather sad coming from someone that spent half a career in financial services, eh? Go figure why I think this way, then think again.

wotsthat

2sides2everystory wrote: »

And now we even have contributors spouting stuff like That silly person probably does not even know who Sid is. Talk about wet behind the ears ...

Wait a minute that silly person was me.

Here's what I said...

Everyone should be reviewing their finance/ investments. Doesn't need to be done constantly and nor does it require the input of an advisor.

It's about taking responsibility for yourself. Isn't that what being a grown-up is all about?

What's wrong with that? Taking financial responsibility for yourself doesn't seem that silly to me.

I opted out of SERPS in around 1990 - It was my decision. If I made losses then that was my problem - the last thing I ever expected was for me to have the chance of better returns but for the government to make up the losses if it didn't work out.

As it stands today opting out was one of the best financial decisions I ever made.

PS I do know who Sid was - he was brilliant in those carry on films.

jamesd

2sides2everystory wrote: »

our funds are generally locked up and dwindling. Fund performance is abysmal everywhere you turn. Funds for UK pensions are supposedly reported in Sterling after adjustment for foreign investments, but no-one asks why pensions have barely made single figure Sterling advances during the period that Sterling has devalued 20% against the Euro. Is that because pension funds have been investing in just UK and US equities?? No I do not think so judging from the £3/4M bonuses falling into the laps of 25 year olds working in emerging markets who cannot believe their luck.

Perhaps you need to pick different funds? Your description bears little resemblance to the performance of my investments.

The time when the Pound was dropping in value initially was also the time when stock markets in general were falling in value. That's why there was no gain at that time. Subsequently there was a very substantial gain as markets recovered, one of the strongest in history. Those who sold near the market lows missed it. Those who stayed in or ought near the lows did OK to very well, depending on when they did it. I came close to doubling my money on emerging markets funds during that time period.

Someone who wasn't watching their investments and acting appropriately wouldn't have been able to benefit from the situation as well as someone who was.

2sides2everystory

jamesd wrote: »

Someone who wasn't watching their investments and acting appropriately wouldn't have been able to benefit from the situation as well as someone who was.

Nicely summed up, James. Lazy fund managers or crooks/lazy investors or victims? All part of someone's grand plan, perhaps ?

Wotsthat, I apologise for my carry on - I was getting a bit carried away with my frustration in this matter.

So what's this "can't lose" government guarantee you have mentioned:

the last thing I ever expected was for me to have the chance of better returns but for the government to make up the losses if it didn't work out.

That's the second time I have seen oblique reference to it in these threads. How can those of us still opted out plan to make that work? Those of us who unlike James have not yet dabbled in the markets in a DIY way and are currently at around break even cf. the government S2P - can we really gamble those contracted out funds with no fear of losing out? What are the deadlines we need to be aware of? Does this mean that we can play with emerging markets too? If so I fancy I might carry on abroad for a bit like James.

jamesd

The fund managers had much less to do with me making money than my own actions, taking a view on what was likely to happen and what had happened. I turned out to be right and profited as a result. The same opportunity was available to anyone else who had a contracted out pot. Up to each individual whether they chose to act on the opportunity or not. And up to them to have educated themselves sufficiently to recognise it and the associated risks.

You appear to have misread the text you attributed to Wotsthat. The text is saying that there is no government guarantee and the poster of the text never expected there to be one. Nor did I.

If you're contracted out you're already dabbling in the markets in some way. That's the fundamental choice made when contracting out, to manage the investments of the money yourself instead of getting whatever the government would otherwise pay out.

2sides2everystory

jamesd wrote: »

You appear to have misread the text you attributed to Wotsthat. The text is saying that there is no government guarantee and the poster of the text never expected there to be one. Nor did I.

Yes, none of us expected there to be any backtrack on the effects of personal decisions made on contracted out years, but are you sure that is what wotsthat is saying now? I read that he has recently been surprised that after having the worry of ensuring that his contracting out decision performed, now it seems he can't go too far wrong ... is that because of the new £140 per week state scheme for everybody starting in 2015 I think, or .. ?

wotsthat

2sides2everystory wrote: »

Yes, none of us expected there to be any backtrack on the effects of personal decisions made on contracted out years, but are you sure that is what wotsthat is saying now? I read that he has recently been surprised that after having the worry of ensuring that his contracting out decision performed, now it seems he can't go too far wrong ... is that because of the new £140 per week state scheme for everybody starting in 2015 I think, or .. ?

Are you confusing me with someone else?

I'm pleased with the performance of my opting out decision. Apart from the financial gains it encouraged me to save more for retirement as the 'free money' boosted my pot. A pot which wouldn't exist if I'd stayed in SERPS other than in the form of a government promise.

I'm actually quite mistrustful of how governments deal with pension policy and think that a government promise made today will be pretty irrelevant when I retire in 20 odd years time.

The £140/ week pension is interesting and so will be the government treatment of those who thought they'd built up a big pot of government promises by staying in SERPS and those who thought they built up a private fund.

Whilst I took my own investment risk and didn't expect government to make up my losses (not that there are any) I fully expect that government will try and claw back some of the gains I've made.

You can see that I'm as cynical as the next person but the OP's position is nothing to do with the financial services industry running some elaborate scam - his fund, which he paid little attention to, has not performed as he would wish. Such is life.