What happens to your pension pot

MPPG

 Hi 

Just looking for some advice in simple terms please.

I amalgamated 3 pensions last year and took 25%

The fund has grown by'£15,000 over the last15 months.

Will the growth continue at that figure if i chose to take £15000 from the fund each year.  What sort of fees would i be charged too?

Once you start drawing off your pension does it still get invested etc. Etc

eskbanker

Future growth (or loss) will be entirely dependent on what the money is invested in, and the fees should be published by the pension company.

Albermarle

MPPG said:

 Hi 

Just looking for some advice in simple terms please.

I amalgamated 3 pensions last year and took 25%

The fund has grown by'£15,000 over the last15 months.
Growth has been high in the last 15 months , as in the previous 3 months , the markets dived due to Covid . If you could check back as to growth from Jan 1st 2020 to today it would almost certainly be less

Will the growth continue at that figure if i chose to take £15000 from the fund each year.  What sort of fees would i be charged too? You do not say what % of the fund £15K is ?
A pension invested in 100% equities could drop 40% in a year or grow 20% . Nobody knows. If the pension is invested in a more medium risk option the extremes could be less

Once you start drawing off your pension does it still get invested etc. Etc This is entirely up to you but normally yes .

The usual rule of thumb is that you can sustainably draw around 4% pa from an invested drawdown pension . If you take more , it is more likely to run out.

green_man

What we could be pretty certain in saying is that the growth will be different in the next 15months to the last 15 months. What no one knows is by how much and whether more or less, in fact it might shrink.  

Certainly you cannot make any future growth assumptions based on one years performance.

Fees vary depending on what provider/platform and whether it is managed etc. Fees can be under 0.5% or over 2%,  cheapest fees are available where you manage yourself so cheapest isn’t necessarily best for everyone.

MPPG

15000 is 8% of the remaining fund and what i might do is draw that sum and work part time too

HeyYeah

Perhaps you should speak to someone at pensionwise (which is free and independent) and make sure you understand your options.

dunstonh

MPPG said:

15000 is 8% of the remaining fund and what i might do is draw that sum and work part time too

So, the answer to your question is no.   an 8% draw rate would erode the fund value and likely run out before you are dead.

Last 15 months followed a market crash.  So, growth was better than average.   You need to average out the positive years, negative years and nothing years.    

Perhaps you should speak to someone at pensionwise (which is free and independent) and make sure you understand your options.

Although they are not allowed to give advice or specific options. Just generic.

MPPG

On balance no as medical advice suggests life expectancy is shorter due to pre existing health issue but also have the full state pension from 67

[Deleted User]

The way you are formulating this question suggests that you need to educate yourself.  And you need to do it quickly.  And keep in mind that markets can go down as well as up. 

MPPG

I am educating myself as I simply want to retire utilise my private pensikn and then top up my state pension with whatever amount is left over.  

Albermarle

MPPG said:

On balance no as medical advice suggests life expectancy is shorter due to pre existing health issue but also have the full state pension from 67

It is OK to have a plan to take out more before you get the state pension and less afterwards. Many people do that .
Also if you really think you will not live to a ripe old age then it could make sense to take more now.

However you still need to plan ahead properly, and basing your plan on one exceptional 15 month period rise in the markets /pension fund is not sensible. During the next 15 months anything could happen to the funds value .

Also how it performs will also depend on how it is invested , which is something you will have to decide.

I am educating myself as I simply want to retire utilise my private pensikn and then top up my state pension with whatever amount is left over.  
Unfortunately nothing about pensions and investments is simple . You have got off to a good start by posing a question on this forum , but part of the answer is you need to look deeper into it to avoid any expensive mistakes.

You asked about charges but that is a relatively minor issue and can be looked at later.