Pension not growing!Time to switch??

jampot7us

Hello, my 11 year Scottish widows stake holder pension is doing nothing! Just about breaking even after com on many of the years. I am soon 47. I currently pay in £580 pounds a month before basic relief. Worth about 78k atm. was worth 68k this time last year...Time for a change guys?

bowlhead99

So it was worth 68, you added 7 + 1.7 of tax relief and gained between 1 and 2 of value increase to get to 78, depending on the rounding; so maybe 3% gain. Although, you say you 'currently' pay 580 a month - were you actually paying that much all year?

The period includes a decent drop in equity markets in the last quarter of 2018 and then a recovery. USD assets have gone up 5% in value in the last couple of months alone, when valued in pounds sterling, due to foreign currency rate changes. A basic mixed asset fund like L&G Multi Index 6 or HSBC Global Strategy Balanced has done 7-8% over a year, before taking off the platform fees you would need to pay to hold them. But how much growth you get depends on what you've chosen to invest in, within your stakeholder pension . We don't know what you chose or with what provider so it's difficult to comment.

Also, if you're looking at a pension statement produced at some recent month end vs the previous year comparative (e.g. end June to end June or May to May instead of literally 'this time last year'), you would get different results - those other funds I mentioned did more like 5% or 2% over the earlier time periods. And the average of the 'IA managed volatility' fund sector was worse than the 2 particular funds I mentioned.

So, difficult to comment because your returns don't come from the fact you have a pension with a provider but what investment fund you actually select within the pension (albeit some providers have a more restricted choice of options, of course). Certainly if you have a very expensive stakeholder charging you 1% a year running cost, you could probably halve that and keep more of the profits for yourself by moving to a cheaper stakeholder pension, personal pension or SIPP.

Brynsam

jampot7us wrote: »

Hello, my 11 year Scottish widows stake holder pension is doing nothing! Just about breaking even after com on many of the years. I am soon 47. I currently pay in £580 pounds a month before basic relief. Worth about 78k atm. was worth 68k this time last year...Time for a change guys?

Which funds are you invested in?

jampot7us

bowlhead99 wrote: »

So it was worth 68, you added 7 + 1.7 of tax relief and gained between 1 and 2 of value increase to get to 78, depending on the rounding; so maybe 3% gain. Although, you say you 'currently' pay 580 a month - were you actually paying that much all year?
Well total in was £688 aug to march.. april to now £722


The period includes a decent drop in equity markets in the last quarter of 2018 and then a recovery. USD assets have gone up 5% in value in the last couple of months alone, when valued in pounds sterling, due to foreign currency rate changes. A basic mixed asset fund like L&G Multi Index 6 or HSBC Global Strategy Balanced has done 7-8% over a year, before taking off the platform fees you would need to pay to hold them. But how much growth you get depends on what you've chosen to invest in, within your stakeholder pension . We don't know what you chose or with what provider so it's difficult to comment.


It is a Scottish Widows "stockmarket growth" stakeholder pension. Medium risk option


Also, if you're looking at a pension statement produced at some recent month end vs the previous year comparative (e.g. end June to end June or May to May instead of literally 'this time last year'), you would get different results - those other funds I mentioned did more like 5% or 2% over the earlier time periods. And the average of the 'IA managed volatility' fund sector was worse than the 2 particular funds I mentioned.

So, difficult to comment because your returns don't come from the fact you have a pension with a provider but what you actually put in the pension (albeit some providers have a more restricted choice of options, of course). Certainly if you have a very expensive stakeholder charging you 1% a year running cost, you could probably halve that and keep more of the profits for yourself by moving to a better stakeholder pension, personal pension or SIPP.

Ok.. I have looked back and added up the total payments i have put into the pot inc basic relief since 18/4/2008 £53097.07 as of today its worth £78551.57

jampot7us

sorry chaps some of the answers are in the quote above...

SonOf

2018 was a negative year. It hit bottom around the 27th December. 2019 has seen that recover but it would be well within expectation to have no growth on your pension over that period.

That is not a reason to change provider.

Linton

See http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0GBR04IC0&tab=1


With a 10 year return of 8.3% annually it doesnt seem too bad considering its high UK allocation, not great but not a complete dog. Actually its 5 year graph shows the fund as very close to the FTSE100. The 12 months up to June were unusually difficult for investments across the world. The OPs fund was much the same as many others.


So I see no particular reason to change it now any more than say 5 years ago.

jampot7us

Linton wrote: »

See http://www.morningstar.co.uk/uk/funds/snapshot/snapshot.aspx?id=F0GBR04IC0&tab=1


With a 10 year return of 8.3% annually it doesnt seem too bad considering its high UK allocation, not great but not a complete dog. Actually its 5 year graph shows the fund as very close to the FTSE100. The 12 months up to June were unusually difficult for investments across the world. The OPs fund was much the same as many others.


So I see no particular reason to change it now any more than say 5 years ago.

Thanks but dont think its my fund sadly...going my full figures above? Could there be more than one version?

Linton

jampot7us wrote: »

Thanks but dont think its my fund sadly...going my full figures above? Could there be more than one version?

There will be slight variations due to different charging rates and extra charges. However the fund I showed had a 1 year return of 1.94%. From the figures you gave your fund roughly returned £78000-12X£580X1.25-£68000=£1300 on an investment of £68K. This is 1.9% which is remarkably close.

Linton

Looking at your figure of total contribution of £53K over the past 12 years or so....


If we assume an average return of 8% and that the contribution each year is £53K/12 this amounts to a total over 12 years of £84K. This is very close to your £79K figure considering that your contributions have been increasing over the years and that your latest higher contributions have only been invested for a few years.


When you are drip feeding half your contributions are invested for less than half the total timeframe.

jampot7us

Many thanks for explaining (even if honest I dont fully understand!) But it sounds as if all is not lost. I suppose my next question is if you were me, what next...what would you do?