Government Help for Private Pensions?

Fair_Flummoxed

Much is, understandably, being done by Government to support businesses and charities and the people employed by them to minimise the impact on them at this particularly difficult time since the restrictions have been Government imposed and peoples' livelihoods are at risk through no fault of their own. I have heard nothing, so far, regarding help for people with private pensions who may have been saving for decades, who are about to retire and who - again through no fault of their own - have seen the values of their hard saved for pensions fall sharply.  In my case, the value of my fairly modest pension fell by £15,000 over a 12 day period at the start of this crisis (some four weeks ago).  I haven't dared look online again to see its value.  I have been contributing to a pension for 32 years and planned to begin drawing down on it in less than three years.  

Clive_Woody

Fair_Flummoxed said:

Much is, understandably, being done by Government to support businesses and charities and the people employed by them to minimise the impact on them at this particularly difficult time since the restrictions have been Government imposed and peoples' livelihoods are at risk through no fault of their own. I have heard nothing, so far, regarding help for people with private pensions who may have been saving for decades, who are about to retire and who - again through no fault of their own - have seen the values of their hard saved for pensions fall sharply.  In my case, the value of my fairly modest pension fell by £15,000 over a 12 day period at the start of this crisis (some four weeks ago).  I haven't dared look online again to see its value.  I have been contributing to a pension for 32 years and planned to begin drawing down on it in less than three years.  

Have you been moving funds into lower risk investments over the last few years? Have you built up a cash pot to tide you over for eventualities such as this?

Has an IFA been advising you or have you been managing your own investments?

Thrugelmir

Private pensions have performed extremely well over the past decade until recently. Onus is on individuals to ensure the investments they hold are suitable to meet their personal objectives. Investments have health warnings for good reason. As well as going up they go down. Governments (i.e. taxpayers) don't underwrite the risks that people expose themselves too. 

dunstonh

 I have heard nothing, so far, regarding help for people with private pensions who may have been saving for decades, who are about to retire and who - again through no fault of their own - have seen the values of their hard saved for pensions fall sharply.

Why would an investor need help?

You make your investment choices.  You live by those choices.

If you are buying an annuity in the near future you should have been de-risking years ago.   If you are going into income drawdown then the drop doesn't matter.   Indeed, you will probably see another drop or two of this scale again in your lifetime (there have been two bigger in the last 20 years and no help was given then).

I would be perverse to reward people who make bad investment choices.

 In my case, the value of my fairly modest pension fell by £15,000 over a 12 day period at the start of this crisis (some four weeks ago). 

Context is needed.  £15,000 could be a lot. it could be little.  We have clients that have lost a couple of hundred thousand and others that have lost £2000.   The loss figure is meaningless without knowing the amounts involved.

 I have been contributing to a pension for 32 years and planned to begin drawing down on it in less than three years. 

And in that time you saw larger drops over 2001-2003 with the dot.com period and larger drops in the credit crunch.   So, why is this worrying you now?

Are you planning an annuity or drawdown?

What level of investment risk are you at?  have you been derisking over the last 5 years?

Would you like to give up some of your money from your growth years?  (investments average out the ups and downs and you have had over a decade of strong growth with just one negative year in that time.  So, the averaging won't take much of that growth away).

Brynsam

Fair_Flummoxed said:

Much is, understandably, being done by Government to support businesses and charities and the people employed by them to minimise the impact on them at this particularly difficult time since the restrictions have been Government imposed and peoples' livelihoods are at risk through no fault of their own. I have heard nothing, so far, regarding help for people with private pensions who may have been saving for decades, who are about to retire and who - again through no fault of their own - have seen the values of their hard saved for pensions fall sharply.  In my case, the value of my fairly modest pension fell by £15,000 over a 12 day period at the start of this crisis (some four weeks ago).  I haven't dared look online again to see its value.  I have been contributing to a pension for 32 years and planned to begin drawing down on it in less than three years.  

Like many others, the unhappy reality is that you may need to rethink your plans. 

cfw1994

OP (that is, to the original poster, Fair_Flummoxed!) - before posting a rant again elsewhere, I would suggest you reply to dunstonh’s reply to you.
My pot has dropped significantly more than yours in £££ terms, but I am also very aware how well it has done very well in prior years....and of course it is the % rise and fall that is of interest.  

The questions I would look are are these:

What % has yours dropped, and over what period?  

How is it today with 12 or 24 months ago?

Where is it invested?
Did you take advice on those investments, and what was your risk level?

The government don’t owe investors anything for the state of the markets.  They don’t penalise you for the significantly over inflation rises you’ve probably enjoyed for the past 10 years either!
With that in mind: what are you hoping to discover?  You talk about a 3 year horizon to start drawing on it: much more detail is needed to figure out whether you might need to revise that, and of course none of us have a crystal ball to see when the end of this crisis will come or what shape the recovery might be.

JoeCrystal

Fair_Flummoxed said:

I have heard nothing, so far, regarding help for people with private pensions who may have been saving for decades, who are about to retire and who - again through no fault of their own - have seen the values of their hard saved for pensions fall sharply.  In my case, the value of my fairly modest pension fell by £15,000 over a 12 day period at the start of this crisis (some four weeks ago).  I haven't dared look online again to see its value.  I have been contributing to a pension for 32 years and planned to begin drawing down on it in less than three years.  

That made little sense, to be honest. The best thing that the Government can do in this case is making sure that people with private pensions do not lose their pots should the pension provider companies go bust (although protection varies depending on each fund/scheme). I know the feeling though, it seems this is the first proper crash so far I gone through since contributing into the pension since 2010, and I have seen a fall of £16,800 or 20% since the start of the year, wiping out the gains since the beginning of 2019 but it will recover in due course.

AnotherJoe

Fair_Flummoxed said:

Much is, understandably, being done by Government to support businesses and charities and the people employed by them to minimise the impact on them at this particularly difficult time since the restrictions have been Government imposed and peoples' livelihoods are at risk through no fault of their own. I have heard nothing, so far, regarding help for people with private pensions who may have been saving for decades, who are about to retire and who - again through no fault of their own - have seen the values of their hard saved for pensions fall sharply.  In my case, the value of my fairly modest pension fell by £15,000 over a 12 day period at the start of this crisis (some four weeks ago).  I haven't dared look online again to see its value.  I have been contributing to a pension for 32 years and planned to begin drawing down on it in less than three years.  

You are incorrect. It is your fault. You didn't take steps such as a cash buffer, flexible plans that allow changing retirement date / reduced drawdown, planning to retire with a sufficiently larger than needed investment thata drop of say 30% would be catered for,
There have been major drops in stock markets before there will be again, why on earth do you think you should be immune from them and having to plan for them. Because that's what your plea comes down to. 

Anonymous101

Much as other people have said pensions in the main these days are investment which the individual has responsibility for. Its up to the individual to educate themselves about investment strategies or employ an IFA to advise them.
Unfortunately for you your approach seems to have left you exposed to stock market variability, long term investors will benefit from this but as your nearing the end of your investment accumulation phase you should have been reducing your exposure to this. The government won't, and shouldn't, underwrite any investment returns which don't meet aspirations on account of the virus. Not perhaps the answer you'd like but its the right one both financially and morally.

steampowered

You want the government to compensate you because your investments have lost value in a recession.  That's ridiculous.

As others have said, stock markets have performed extremely well for the past few decades, even taking into account the current drop. 

Remember that you are presumably going to be drawing on this pension for years ahead. That's plenty of time for stock markets to recover. 

tigerspill

And they give you a state pension.