Pension plan performance

Worried_of_wakefield

Morning all, thought I would pop this question out before I make my way out for my 7.16 T time for 4hrs of misery.

I have a personal pension plan that will supplement my deferred final salary pension.I have about 6 year to go before I draw both. Between myself and my employer we have been contributing approx £750 / month for the last 18month. Doing a simple calc the pot value has increased by 16%.
Whilst I understand my pension pot may next week plummet, as a comparison to what you guys are enjoying is my 16% a fair comparison. Reason I ask is that the Friends Life 'fund of funds' pension I have invested in was described recently as within something called quartile 3 ( is this right?) and understand this to be not so good.

WobblyDog

The unit price of my Aegon Stakeholder Default pension fund has increased by about 17% in the last 18 months. The last 18 months appear to have been a good period for at least some asset classes used by pension funds. For example, the FTSE all share index has risen about 20% in that period.

If the overall value of your pension pot has only increased by 16% in the last 18 months, including all the incoming contributions, that sounds a bit low to me, unless the pot is huge.

bigadaj

Quartile 3 indicates below average performance, so it's not great. My investments are all tuning at around 20% year on year increase, and 18 months ago was a near market low so it sounds as though your pension could do better, however not disastrous and a lot better than cash.

Fund if funds sounds as though it could be high charging, and charges are what can obviously hit performance so worth checking these.

dunstonh

Whilst quartile three is not great in discrete performance terms, it should be noted that many index trackers are quartile three as well. Also, the sector it is in could carry a wide range of risk levels. For example, a recent review of the old balanced managed sector (now mixed 40-85% equity) found on a 1-10 risk scale based on volatility that funds from risk 5 to risk 9 were present in that sector. Most default funds are in that sector.

somethingcorporate

about 18% over the same time frame on my SL pension.

Linton

Worried_of_wakefield wrote: »

Morning all, thought I would pop this question out before I make my way out for my 7.16 T time for 4hrs of misery.

I have a personal pension plan that will supplement my deferred final salary pension.I have about 6 year to go before I draw both. Between myself and my employer we have been contributing approx £750 / month for the last 18month. Doing a simple calc the pot value has increased by 16%.
Whilst I understand my pension pot may next week plummet, as a comparison to what you guys are enjoying is my 16% a fair comparison. Reason I ask is that the Friends Life 'fund of funds' pension I have invested in was described recently as within something called quartile 3 ( is this right?) and understand this to be not so good.

You cant simply compare your returns with other peoples. You are holding a fund of funds which as its name suggests holds a varied range of investments with the objective of reducing volatility. So in the good times such as the past few years it will perform worse than many more focused investments, whereas in the bad times it should perform better than those same investments. It is up to you to choose funds with the risk and return that meets your needs yet wont keep you awake at night.

In the past 18 months my best fund has returned 54% and the worse has lost 14%. I wouldnt recommend either as suitable for a major part of ones pension.

What isnt clear from the post is whether the 16% includes the contributions or is your calculation of the investment return. If the former, £750/month doesnt mean much if we dont know the contribution as a % of the total pension pot.

Worried_of_wakefield

Linton wrote: »

What isnt clear from the post is whether the 16% includes the contributions or is your calculation of the investment return. If the former, £750/month doesnt mean much if we dont know the contribution as a % of the total pension pot.

I started with a lump sum ( pension consolidations) of £4k, then have added 18 x £750 monthly payments The unit price started at 101p and has risen fairly consistently to its present price of 130p. I simply made a calculation between money paid in and the present pot value. As original post this pension will supplement my final salary but still anxious that i'm not backing a 'wrong un'

Linton

Worried_of_wakefield wrote: »

I started with a lump sum ( pension consolidations) of £4k, then have added 18 x £750 monthly payments The unit price started at 101p and has risen fairly consistently to its present price of 130p. I simply made a calculation between money paid in and the present pot value. As original post this pension will supplement my final salary but still anxious that i'm not backing a 'wrong un'

So the fund has gone from 101p to 130p in 18 months = a 28.7% increase and is rather better than pension figures given by previous responders.

I guess the reason why you said 16% originally may be that you didnt take into account that on average your monthly contributions have only been invested for 9 months.

You should be happy!

Financial_Saddler

The only Friends Life fund of funds which I can find that vaguely corresponds to WOW's description is the Adventurous fund - a 100% global equity fund made up of Blackrock trackers.
Is that the one?

Worried_of_wakefield

Yes Financial Saddler thats the one,

And yes Linton, I understand your point, feel much better!