Pension value less than what I paid in?

SnowDrop

Hello,

My employer enrolled me into a workplace pension scheme in 2013 and I have paid in £1010 since, including my employer`s contributions. But when I log into my online pension account I see the value of my pension is £560? How is this possible? What happened to the remaining £450? Sorry about being ignorant but I just don`t get it.
All answers are appreciated,

jennyjj

SnowDrop wrote: »

Hello,

My employer enrolled me into a workplace pension scheme in 2013 and I have paid in £1010 since, including my employer`s contributions. But when I log into my online pension account I see the value of my pension is £560? How is this possible? What happened to the remaining £450? Sorry about being ignorant but I just don`t get it.
All answers are appreciated,

It could be one of the following.

1. The money taken from your salary wasn't sent to the scheme admins.
2. The funds invested have done very badly, since investment.
3. Up front and management charges have been significant.
4. Combination of 1, 2, 3.

Your £1010 + probably matching funds from your employer should easily be worth £1500+ even with rubbish investment returns.

You should have some visibility of all those three aspects through your pension scheme portal, or in an annual paper report.
Personally, I suspect choice 1.

AnotherJoe

The most likely explanation, on the face of it, is that your employers contributions have never been paid in. Can you see how much has been paid in each month ?

xylophone

Have you checked with the provider that the employer contributions have been received?

jamesd

Is £560 the value of the future annual pension income or the current value of the investments inside the pension?

SnowDrop

Thank you for the replies.

I do receive annual statements and according to these, employer contributions have been paid in. My last statement says `in today`s prices your plan could be worth £1350`, but I am very confused about the `value` of pension being £560 on my online account. This is the figure that shows when I log in.
Total fund value as per last statement is £650.

I am totally confused about these numbers.

SnowDrop

jamesd wrote: »

Is £560 the value of the future annual pension income or the current value of the investments inside the pension?

Future annual pension income cannot be £560 (yet), and I am not sure what the current value of the investment is. I have definitely paid in £1010 (including employer`s matching contributions). Could the value of this investment have dropped to £560?

somethingcorporate

What is it invested in?

Seems really unlikely to have dropped so much. The growth in my pension has been positive every year for the last 6-7 or so and is fairly typical.

jennyjj

SnowDrop wrote: »

Thank you for the replies.

I do receive annual statements and according to these, employer contributions have been paid in. My last statement says `in today`s prices your plan could be worth £1350`, but I am very confused about the `value` of pension being £560 on my online account. This is the figure that shows when I log in.
Total fund value as per last statement is £650.

I am totally confused about these numbers.

So the contributions figure you quoted was sum of employer and employee contributions and they have reached the fund as it should. Good.
When I look at my StandardLife portal, I'm instantly given the 'Value of my fund' That is the sum of all contributions in and the growth that has been achieved so far. I concur with the previous poster who says to expect the growth to be positive and add to the fund, unless the investments were rubbish.
I'm then able to get indicative 'retirement pension income' that my fund can give me. In my case, that's a small fraction of the fund value. For example, contributions may have been £40,000: Current fund value might be £50,000 and projected pension might be £1,000 per year. There is also a 'Transfer value' which is close to the fund value.
With the providers that I'm familiar with, you can get all sorts of details, such as what investments you hold, what they cost, when they were purchased into the fund, and what they are worth now.
It's worth you drilling around the portal and hovering any ? mark help links that might be there.
Who's the pension scheme provider?
It now sounds like value is hemorrhaging from your fund. It can happen if badly invested, but yours sounds a bit extreme.
Is it maybe a scheme with massive front end loading of charges, where e.g. 50% of first year contributions are paid over to an intermediary?

Malthusian

jennyjj wrote: »

Is it maybe a scheme with massive front end loading of charges, where e.g. 50% of first year contributions are paid over to an intermediary?

Not allowed under auto-enrolment rules, and that kind of charging structure left the market over a decade ago.

Has the OP rung the pension provider and asked them to explain simply why the value is only about half of what has been paid in? The value is too low to be explained by investment performance or charges. Which only leaves some kind of admin !!!!-up.

PensionTech

Future annual pension income cannot be £560 (yet)

It can if it's including projected contributions for the rest of your working life, if you are relatively close to retirement age. Some projections do include these. Or, it could be using your current pot but projecting an income in future money terms (i.e. not inflation-adjusted) but assuming mid-to-high investment returns for a long period until retirement age (I don't know how old you are).

Can you see anything that specifically says the words fund value? "Value" could mean anything, regular pension income or capital amount, today's prices or not - "fund value" means what is actually sitting in the pot today.