Warning it’s not as safe as you think!

Albermarle

TreborDrib said:

So my take on this is trust nothing you are told!
Nothing is low risk it is just relative and chunks of anyone’s pension can disappear overnight.
Until the money is in your hands anything you are told is worthless!

To quite a well used phrase ' Investments can go down as well as up'
You should look how the pension performed over many years . You will probably see that the 8% drop at the end was only a minor blip in the overall picture.

dunstonh

So my take on this is trust nothing you are told!

That is not a very logical take.

Nothing is low risk it is just relative and chunks of anyone’s pension can disappear overnight.

Depends on what you mean by chunk.   Are equities likely to lose 50% overnight? yes.  Are gilts likely to do that? no

Until the money is in your hands anything you are told is worthless!

no

Thrugelmir

TreborDrib said:

So my take on this is trust nothing you are told!
Nothing is low risk it is just relative and chunks of anyone’s pension can disappear overnight.
Until the money is in your hands anything you are told is worthless!

If you've never read a risk warning relating to investments that has to be clearly displayed and offer no ambiguity. Then there's little that can be said. As the message couldn't be more blunt in terms of getting the message across. 

TreborDrib

If I had known there was such a massive risk I would have done so.
Foolishly I believed what I was told that Gilts were minimal risk and
25% was in cash funds but even that dropped.

Prism

TreborDrib said:

If I had known there was such a massive risk I would have done so.
Foolishly I believed what I was told that Gilts were minimal risk and
25% was in cash funds but even that dropped.

On the 1-7 scale the Vanguard gilt fund is a 4 and the global equity fund is a 5. So pretty similar. 

dunstonh

Foolishly I believed what I was told that Gilts were minimal risk and

They are the lowest risk of the risk based assets (broadly speaking).  That doesn't mean they are risk free.

Takedap

dunstonh said:

Are equities likely to lose 50% overnight?  yes. 

While I've always known (and accepted) that a 50% loss is possible, I find it very disconcerting that an IFA would describe it as "likely". 

Malthusian

TreborDrib said:

If I had known there was such a massive risk I would have done so.
Foolishly I believed what I was told that Gilts were minimal risk and
25% was in cash funds but even that dropped.

A risk that your gilt fund falls to a 12% profit instead of a 20% profit over the 5 year period you were switching into it isn't a massive risk.

If this isn't how your pension's lifestyling worked I'm happy to be corrected, but that's the most likely scenario.

Sticking all your money in gilts thinking (wrongly) that gilts are the same thing as cash and then seeing an 8% fall would be very annoying, but that's almost certainly not what happened.

TreborDrib

Hi All thanks for your input.
Speaking with friends like myself not pension wise but trusting in the people
that manage the funds they were also surprised at what had happened.
Not so much about the change in value but that when given  a transfer value it 
is then not what is transferred and you are not warned.
Both the Gilts and Cash funds fell in value 

dunstonh

Takedap said:

dunstonh said:

Are equities likely to lose 50% overnight?  yes. 

While I've always known (and accepted) that a 50% loss is possible, I find it very disconcerting that an IFA would describe it as "likely". 

There have been two loss periods in the last 20 years where major market equities fell by over 40%.