Pizz Poor Pension Fund Retuns?

missile

Hi,

My wife has two small pensions funds from previous employment.

AEGON from 2006 has returned circa 1.5% compound.

Clerical & Medical from 2005 has actually lost circa 50% in value.

AnotherJoe

Presumably management charges, possibly fixed as an amount rather than a percentage, are responsible for this at least in part.
She should xfer them asap.

( I agree its rubbish)

Linton

Pension companies offer a wide range of funds that invest in different things. Returns like the ones you quote are more likely to be due to a bad choice of funds than the choice of fund manager. Simply transferring the money to another company but investing in the same type of funds probably wont help you very much.

What are the fund or pension names?

dunstonh

AEGON from 2006 has returned circa 1.5% compound.

I have a number of Aegon pensions on my books from that period and they have all done very nicely.

Clerical & Medical from 2005 has actually lost circa 50% in value.

I have a number of CM pensions on my books from that period and they have all done very nicely. Indeed, the CM personal pension in the mid to late 2000s was very good value for money for its time.

Pensions do not perform. The funds you invest in are where the performance is. Focus on the fund. Not the pension. (caveat being when there are safeguarded benefits where the value can be on the benefit rather than the performance)

missile

I would suggest:
No one in an occupational pension has the choice of pension scheme provider.
Most of us trust that a reputable company will employ fund managers who can choose better funds than we can.
+++
My wife no longer trusts financial services and intends encashing both funds. One before and one after 05th April.

AlanP_2

missile wrote: »

I would suggest:
No one in an occupational pension has the choice of pension scheme provider.
Most of us trust that a reputable company will employ fund managers who can choose better funds than we can.
+++
My wife no longer trusts financial services and intends encashing both funds. One before and one after 05th April.

I can understand that point of view but would counsel you both to just take a little while to understand where you are, what you have got and what your most beneficial options are moving ahead.

I agree that you don't have choice over the provider the employer selects but you USUALLY have choice over what to invest in with that provider i.e. what funds as per the points made above.

It also sounds like they are from previous employment so you have had the choice of provider I would suggest since leaving the relevant employer as you can transfer your investments somewhere else at any stage, so you could do that now.

Which funds is your wife invested in?

Taking the cash may be an option, dependent on age, but it could trigger a large income tax payment and you are then left with a decision to make over " what do i with £xxx"?

BananaRepublic

You need to find out the pension management charges, the funds, and the fund charges. Once you have confirmed that the chosen funds are poor, you can transfer to better funds within the same pension scheme, or transfer out. The problem with many providers is that they limit your choice of funds, or if they do allow external funds, they sometimes charge a significant fee such as 1% in addition to the fund charge. An alternative to switching fund is to transfer out to a SIPP, where you will have a wider range of funds to choose from, and probably lower management fees. Obviously you have to decide which funds, in which case you need to understand the basics of investment such as diversification, market sectors, currency risk and so on.

dunstonh

No one in an occupational pension has the choice of pension scheme provider.

Provider is not normally something that is much concern. It is the product offering and the fund selection that is more important.

Most of us trust that a reputable company will employ fund managers who can choose better funds than we can.

No. That is a misunderstanding. It is your responsibility or that of your financial adviser to select the funds you invest in.

If you choose to stick the lot in a deposit fund or 100% into bonds then there is going to be no-one to stop you doing that. Even when its known that all the alternatives will likely do better over the long term.

My wife no longer trusts financial services and intends encashing both funds. One before and one after 05th April.

Bad decision making based on bad assumptions and flawed opinions is not the answer. What is she going to do with the money? Put it into another financial product no doubt. Probably a lower quality one like cash savings (where charges are higher and returns lower).

You have been on this board long enough to know that things come down to understanding or lack of understanding and nothing is black and white but shades of grey. What are these funds she is investing in because the two providers you mention offer many funds and it would be a struggle to find ones that match the figures you are talking about.

missile

Thanks for your comments. I am sure a more savvy investor could have made better investment decisions.

AEGON fund SE UNIVERSAL 2020 & yearly charge 1%

Clerical Medical, I don't have up to date info available.

She trusted her employers who arranged transfer of her funds to two reputable companies with a good track record. She believed they would invest her funds wisely. It seems her faith was misplaced.

dunstonh

AEGON fund SE UNIVERSAL 2020 & yearly charge 1%

The charge on that would likely be 0.75% now as its an internal fund and capped at 0.75% following a recent change. So, the default charge on the fund was 1% but the actual charge on that scheme is likely 0.75%

That fund moves to near cash by 2020. It has been performing well considering its very low risk.
17.95% in 2016
2.25% in 2015
9.32% in 2014
13.61% in 2013
Each of those four years it was better than sector average.

The fund was launched in 2012. That is partly misleading in itself as that is when risk reduction would have started. Prior to that it would have been the universal lifetsyle collection (which is the fund prior to risk reduction). 10 year performance on that one is 5.5% per annum.

She trusted her employer who arranged transfer of her fund to two reputable companies with a good track record. She believed they would invest her funds wisely. It seems her faith was misplaced.

Or perhaps she is mistaken given the performance does not match what she has told you.

missile

dunstonh wrote: »

The charge on that would likely be 0.75% now as its an internal fund and capped at 0.75% following a recent change. So, the default charge on the fund was 1% but the actual charge on that scheme is likely 0.75%

That fund moves to near cash by 2020. It has been performing well considering its very low risk.
17.95% in 2016
2.25% in 2015
9.32% in 2014
13.61% in 2013
Each of those four years it was better than sector average.

The fund was launched in 2012. That is partly misleading in itself as that is when risk reduction would have started. Prior to that it would have been the universal lifetsyle collection (which is the fund prior to risk reduction). 10 year performance on that one is 5.5% per annum.



Or perhaps she is mistaken given the performance does not match what she has told you.

Yearly charge 1% is as stated in her last illustration dated 08/04/2016
Which part of my wife's sorry experience do you claim to be inaccurate?