Big drop in the value of my pension pot

thornlv

Today I had a shock checking my pension pot with legal and general workplace pension. I last checked about the 20th of February and the value was close to £77,000 but today (20th March) that has dropped to just £60,000, a drop of 17,000.
Is this right, is it about average compared to other companies.
In view of the current coronavirus crisis and the government's forecast of not getting on top of it for another 3 months at least, Is it likely to continue falling by that amount each month and eventually I could lose all of it?
What are my options?, I have a knee jerk wish to just pull it all out now into my bank and pay the tax on it.
Somewhat contradictory though, I have another pension with standard Life and checking today has still increased by its usual monthly increase.

Dazed_and_C0nfused

How old are you?

Linton

It all depends on what funds you are using.  A drop of £17K from £77K is 22% which is to be expected for a high equity (and higher risk) fund since the coronavirus has seriously upset the markets globally.   If your SL pension has a "usual monthly increase" it could be "With Profits" whereby performance is smoothed.  This gives a more comfortable ride but over the long term will provide lower returns.

Once we can see the end of the CV it would be expected that the markets will recover.  Selling now will ensure you make a loss.

waveydavey48

As lance corporal Jones used to say ..... "Don't panic!!"
Just stop checking it.
Personally I am waiting for the new tax year so I can pile money into my S&S ISA.

thornlv

I am 61 and unemployed. Very upset with this as I was hoping to retire early (health issues).
No doubt though that someone will still get their bonus for losing others money, and a nice golden handshake when they move on to another company to do the same.
Which prompts the question, is their any protection on this due to this crisis, what if i moved it to SL

george4064

thornlv said:

I am 61 and unemployed. Very upset with this as I was hoping to retire early (health issues).
No doubt though that someone will still get their bonus for losing others money, and a nice golden handshake when they move on to another company to do the same.
Which prompts the question, is their any protection on this due to this crisis, what if i moved it to SL

Linton made a very good point around what are you actually invested in your pension(s), depending on what you are invested will have a big impact on how they perform during volatile times such as now.

For what it's worth, my ISA is down about 25% since 1st Jan but I am comfortable with that because I knew what I was getting into when investing in a near 100% equity portfolio allocation strategy.

dunstonh

Is this right, is it about average compared to other companies.

Its not the pension company that matters. They have no influence on your pension value.  It is where you invest that matters.  And the figure is in line with what you would expect.

In view of the current coronavirus crisis and the government's forecast of not getting on top of it for another 3 months at least, Is it likely to continue falling by that amount each month and eventually I could lose all of it?

No you cannot lose it all.  Yet it could continue to fall a bit more but the drop size is not unusual and there have been two bigger drops in the last 20 years.   So, in that respect, it is all quite normal.

I have a knee jerk wish to just pull it all out now into my bank and pay the tax on it.

That would almost certainly be foolish and cause you to lose more.

 Very upset with this as I was hoping to retire early (health issues).

This sort of drop is normal.  So, its a bit like saying you are upset it rained today as you hoped it would be sunny.

No doubt though that someone will still get their bonus for losing others money, and a nice golden handshake when they move on to another company to do the same.

I understand you may not know how investments work but that sort of statement is not going to help you. It is incorrect.  

Investment decisions are made by you or your financial adviser if you have one.   You are invested where you chose to invest and you get the volatility that goes along with it.  Nobody else is responsible.

Which prompts the question, is their any protection on this due to this crisis, what if i moved it to SL

What do you mean by protection?

[Deleted User]

thornlv said:

I am 61 and unemployed. Very upset with this as I was hoping to retire early (health issues).
No doubt though that someone will still get their bonus for losing others money, and a nice golden handshake when they move on to another company to do the same.
Which prompts the question, is their any protection on this due to this crisis, what if i moved it to SL

The answer to your question is “no”. If you invest then you are not protected from either upsides or downsides of the market. 

Something to keep in mind: depending on your fund, the value could be meaningless. Many include assets which become illiquid during such an event. Right now this applies not just to the property but also to corporate bonds.  If you were to sell them now, you won’t  get the price on the label. 

The right time to review your strategy is when the market is calm. Now is too late. Best course of action: do nothing. 

Thrugelmir

thornlv said:

What are my options?, 

Give serious consideration as to what the money is actually invested in. 

Albermarle

You may also want to read few of the other threads on a similar theme 
https://forums.moneysavingexpert.com/discussion/6116805/im-hoping-i-should-leave-well-alone#latest

thornlv

Thanks a lot for the input, feel a lot calmer now.
However, i don't think you can equate losing £17000 to a rainy day.

And Philip Greene anyone?

On the other hand. Should I now change the investments into a less risky area (what in ?), all of it. I presume then that as the market is on a downer, this will curb the losses. Then change again if, when there is improvement.
Is it also possible that most of that loss could be recovered in the next 2 - 3 years.