My pension pot is taking a big hit

dunstonh

And my pot is still dropping and the outlook looks bleak

You have had about 10 larger drops than this in the last 25 years.   Why are you worrying about this one? 
What did you do in those previous drops?

When people used to get annual statements, they missed the peaks and troughs most of the time.  They never saw the volatility.   Now they have online access, some people look at it daily.  That is a recipe for disaster.   Even the quarterly statements, required under an EU directive, are too much for some.

garyelder

Very true it is to easy to look before I probably never did notice the drops

[Deleted User]

garyelder said:

Very true it is to easy to look before I probably never did notice the drops

Markets did go down in January but February has been a positive month so far.  People react stronger to a 100k loss than to a 100k gain.  Thats why someone watching daily fluctuations often feels bad even if the market os trending up. 

Generally, one would expect more volatility in 2022 than what we’ve had since since March/April 2020.  Corrections happen most years. You need to be ready. 

Given the jitters what you may need tweaking.  I would set a date of Jan 1st 2023 for the adjustments and do some reading/planning in the months ahead. 

bostonerimus

Is anyone checking annuity rates? The shifting of the financing and risk of pensions from the employer to the employee with the creeping replacement of DB pensions by DC plans and drawdown is going to lead to a lot of sleepless nights for many retirees. That's just another fact of today along with NHS waiting lines and inflation...

2Sheds

One of mine from previous employer £32.7k has had a 10% hit, just when I was considering moving to my present employer

Sods law I was hoping inflation might push up a bit, but I presume a possible war doesn't help

Audaxer

garyelder said:

And my pot is still dropping and the outlook looks bleak
What should I do 

 Just don’t look 

You could think about it as opportunity to invest more to take advantage of the lower prices. 

Albermarle

and the outlook looks bleak

Does it ? Granted inflation is causing an issue and stock markets are down a bit , but

Covid retreating and restrictions largely lifted .

Employment levels high and wages increasing 

Soon be Spring and then Summer holidays ( hopefully !) 

dunstonh

Is anyone checking annuity rates?

Still low.   Whilst interest rates should filter through to gilts and therefore the annuity rate, the mortality gain has been in decline.  Fewer people are buying annuities reducing the cross-subsidy pool and an increase in the number of cases enhanced/impaired annuities take on nowadays.  i.e. if the provider is paying a higher annuity rate for high cholesterol then there is going to be reduced mortality gain for those with high cholesterol compared to the days those people would have bought a lifetime annuity with no medical enhancements.

That said, when we eventually get back to 7% interest rates or thereabouts,  I can imagine annuities would become popular again.  Especially with the improved death benefits, they can offer now thanks to the change in legislation.

[Deleted User]

when we eventually get back to 7% interest rates or thereabouts,

This is an audacious prediction.  While the next interest rate move as signalled by central banks is somewhat predictable, going beyond that is a  crapshoot.  When comparing past predictions vs actual interest rate movements, there is no sign of positive correlation.  In the case of annuities, they are impacted by very long duration bonds (eg 15 and 30 years) and overnight interest rate won’t have direct impact anyway. 

“Low annuity rates” is a meaningless statement because a) not known what will happen to them in the future.  b) its a great solution for lots of people.  Waiting for “better” rates = risking the exact opposite; the type of scenario and lack of certainty annuity purchasers want to avoid. 

noclaf

Op, here's some alternative perspective:

I am 40 and my total pension value (DC's) is around £106k currently (+£20k in a LISA). If I end up with a £500k + pot at retirement will be well chuffed, even higher would be a bonus.
Last year I moved a smaller pension into a BG growth fund......it took an absolute hammering recently and all while I am awaiting for a transfer out of the scheme (old employer scheme). Painful but all part of the journey and learning process.

Relatively, you are doing quite well I'd say.