Pension fund growth

Nick9967

Hi all
Looking for a little, very approximate,  guidance, I've pulled together a basic spread sheet showing my possible retirement position (am 53 want to retire or at least minimise work by 58, probably need to work a minimum salary 16 hour week till 62 ish)
I have 201k in a Scottish Widows (level 7 risk i believe) pension , invested in:
SW Fidelity Asia Pension 15.041%, SW Invesco-Perpetual Corporate Bond Pension 10.274%, Scottish Widows Cash Pension 5.653%, Scottish Widows European Pension 3.354%,  Scottish Widows Fixed Interest Pension 10.858%, Scottish Widows International Pension 15.91%, Scottish Widows Property Pension 1.178% & UK Equity 19.063%
I'm still paying in monthly, about £220 gross, (not as much as i used to as I've down graded my job and so salary as well quite dramatically) I'm a total numpty and have no clue really on calculating investments etc etc but want to give myself a reasonable guide on what the yearly growth maybe be like for the next 5 years.
I know this is a bit finger in the air and no one can really predict this but what level might you use to give some sort of representation of what that pot might look like in 5 years?
What would be sensible to guide myself with , 5%, 6%, 8% or 3%?
Any guidance or help would be useful thanks.

Albermarle

Do you know if it is graded Level 7 out of 7 for risk ? It does not look that risky , so maybe it is 7 out of 10. Unfortunately there are a few different risk scales around. If it is 7 out of 10 you could be looking at maybe 4/5% before inflation , or 2/3 % after inflation, over the next 10 years, Over a shorter time scale you would have to have a wider range +/-.
Of course nothing is guaranteed. Normally as you approach retirement most people ( not all) reduce the risk level to reduce  the size of any market related drops. 
If you can live off other income streams and leave the pension alone for a few more years then this risk reduction strategy can be delayed.

dunstonh

 have 201k in a Scottish Widows (level 7 risk i believe) pension 

Is that 7 out of 7, 7 out of 10, 15 100 etc?  Is that 7 only looking at mainstream options or a wider scale including non-mainstream?  Context on any risk scale is important.  both the start point and end point  (not all starting points start with cash = 1.

I know this is a bit finger in the air and no one can really predict this but what level might you use to give some sort of representation of what that pot might look like in 5 years?

It is Scottish Widows.  So, underperformance would be worth factoring in.   Maybe take benchmark assumptions and deduct a further 20%.

Nick9967

Albermarle said:

Do you know if it is graded Level 7 out of 7 for risk ? It does not look that risky , so maybe it is 7 out of 10. Unfortunately there are a few different risk scales around. If it is 7 out of 10 you could be looking at maybe 4/5% before inflation , or 2/3 % after inflation, over the next 10 years, Over a shorter time scale you would have to have a wider range +/-.
Of course nothing is guaranteed. Normally as you approach retirement most people ( not all) reduce the risk level to reduce  the size of any market related drops. 
If you can live off other income streams and leave the pension alone for a few more years then this risk reduction strategy can be delayed.

7 out of 10 I'm sure, I have other income streams , 2 houses, working wife etc etc , so i dont need to be spot just reasonable, 
thanks  

Nick9967

dunstonh said:

 have 201k in a Scottish Widows (level 7 risk i believe) pension 

Is that 7 out of 7, 7 out of 10, 15 100 etc?  Is that 7 only looking at mainstream options or a wider scale including non-mainstream?  Context on any risk scale is important.  both the start point and end point  (not all starting points start with cash = 1.

I know this is a bit finger in the air and no one can really predict this but what level might you use to give some sort of representation of what that pot might look like in 5 years?

It is Scottish Widows.  So, underperformance would be worth factoring in.   Maybe take benchmark assumptions and deduct a further 20%.

To be fair i thought there was only 1 generic risk scale in Pension investments , out of 10, as that's all I've ever discussed with IFA's in 30 years or so, but clearly that seems not to be the case, anyway it is definitely 7 out of 10 

Albermarle

The IFA's may have been 'out of 10' but for sure if you look at most individual fund factsheets ( including for SW) they normally go from 1 to 7 .

BritishInvestor

dunstonh said:

It is Scottish Widows.  So, underperformance would be worth factoring in.   Maybe take benchmark assumptions and deduct a further 20%.

Ouch!!

Nick9967

Am i missing a dig at SW here? in fact to be fair, when all is factored in and with little or no management from an IFA  even on a unusual year like this mine is +3 - 4% so far this year so you know what they've kept mine going , I know some that are far far worse so far this year and a little scary!

kinger101

Nick9967 said:

Am i missing a dig at SW here? in fact to be fair, when all is factored in and with little or no management from an IFA  even on a unusual year like this mine is +3 - 4% so far this year so you know what they've kept mine going , I know some that are far far worse so far this year and a little scary!

Limited choice of expensive funds.  On top of that, their old web interface only works properly with internet explorer and their new interface has minimal functionality.

I have my workplace pension with them so have no choice, but can at least transfer out every now and again.  I wouldn't choose them.

dunstonh

Nick9967 said:

dunstonh said:

 have 201k in a Scottish Widows (level 7 risk i believe) pension 

Is that 7 out of 7, 7 out of 10, 15 100 etc?  Is that 7 only looking at mainstream options or a wider scale including non-mainstream?  Context on any risk scale is important.  both the start point and end point  (not all starting points start with cash = 1.

I know this is a bit finger in the air and no one can really predict this but what level might you use to give some sort of representation of what that pot might look like in 5 years?

It is Scottish Widows.  So, underperformance would be worth factoring in.   Maybe take benchmark assumptions and deduct a further 20%.

To be fair i thought there was only 1 generic risk scale in Pension investments , out of 10, as that's all I've ever discussed with IFA's in 30 years or so, but clearly that seems not to be the case, anyway it is definitely 7 out of 10 

There is no generic scale even when firms use the same numbers in the scale.   Some scales are evenly weighted. others widen in the middle ground.   We use a 1-5 scale for an explanation but have time weightings applied within that.  However, on this site, I will often use a crude 1-10 scale as an example.

Am i missing a dig at SW here? in fact to be fair, when all is factored in and with little or no management from an IFA  even on a unusual year like this mine is +3 - 4% so far this year so you know what they've kept mine going , I know some that are far far worse so far this year and a little scary!

I am not known for my subtle comments 
You are in insured funds which are expensive and a good few of them are low quality.    
We don't have anyone left with SW on their individual pensions.  It would be around 2006ish since we last used them for any investment products.   They used to be pretty good before then.    It is also a shame as Clerical Medical had the better investment products but Lloyds decided the SW brand was more recognisable than Clerical Medical so it kept the weaker SW products and they haven't developed and updated them since.      SW focus more on the workplace pension market nowadays where the bulk of the money goes into simple multi-asset funds rather than people looking to have a portfolio of single sector funds.   They created some pretty good options on that front (wouldnt keep the serious investors happy but very suitable for the low knowledge investors).