Comparing pension performance

dilby

Hi all - I'm trying to find a way to compare the performance of a pension fund (i've been with aviva for a few years) and am struggling a bit. When searching results come back either relating to individual stocks and shares (where i just want an overall idea for the fund) or super complex methods for pros. I'm not too worried about nitty gritty stuff as it's all a bit over my head once you get too complicated; I just want to basically know - is my pension that good to compared to other managed uk pensions? (Don't want to go down road of SIPPS). I was hoping there was some kind of benchmark where say you could look up avivas offering, or pensionbee etc and find out how they compare based on past performance.

Thanks so much!

gm0

You are I am afraid confusing the bag with what is inside it.  The investments perform. Pension wrappers from different companies are just a bag to hold them in - some a bit cheaper than others but essentially pretty "neutral" as to the outcome. 

Comparing investment funds with each other or with categories at different levels of risk can be done on the trustnet website.  You need to create an account and can compare fund with fund or a particular investment (set of funds of your choosing) against stock market indexes or an Investment Association Category.  So a "Cautious" category or some other level which corresponds to the average of a list of similar options.  A "how is it doing in the pack" view.

A simpler way to look at it (as the trustnet tools have a bit of a learning curve) would be to look up the historic performance of say - the Vanguard Life Strategy funds.  VLS20,40,60,80,100 over recent years and then compare what your reports show you with these five.  If you understand what your current holding contains roughly - % equities % bonds %other things then you can take a simple view of whether it "performs"  similarly to investments at a similar risk tier. 

Not precise but a helpful first step nonetheless

dunstonh

 I just want to basically know - is my pension that good to compared to other managed uk pensions? (Don't want to go down road of SIPPS).

Pensions do not perform.   The investment funds are where the performance is.      Modern pensions are mostly whole of market nowadays apart from the old fashioned ones or most workplace pensions (which aim for simplicity over choice)

I was hoping there was some kind of benchmark where say you could look up avivas offering, or pensionbee etc and find out how they compare based on past performance.

Aviva's main offering is whole of market and can offer 30,000 odd investments.  Pensionbee is restricted and doesn't have a long history.  Most of the robo-providers (app based/internet only) tend not to publish their growth figures to the independent data sites. 

At the end of the day, forget about other pensions.  Focus on what you have.    With modern plans that should be quite easy. With olderer plans that can be more difficult.   What fund(s) do you have?

dilby

dunstonh said:

 I just want to basically know - is my pension that good to compared to other managed uk pensions? (Don't want to go down road of SIPPS).

Pensions do not perform.   The investment funds are where the performance is.      Modern pensions are mostly whole of market nowadays apart from the old fashioned ones or most workplace pensions (which aim for simplicity over choice)

I was hoping there was some kind of benchmark where say you could look up avivas offering, or pensionbee etc and find out how they compare based on past performance.

Aviva's main offering is whole of market and can offer 30,000 odd investments.  Pensionbee is restricted and doesn't have a long history.  Most of the robo-providers (app based/internet only) tend not to publish their growth figures to the independent data sites. 

At the end of the day, forget about other pensions.  Focus on what you have.    With modern plans that should be quite easy. With olderer plans that can be more difficult.   What fund(s) do you have?

I have a pension with aviva.

When you say pensions don't perform but funds do, i suppose i'm referring to the pension as a collection of funds, so in essence being something that performs. In the example of pensionbee vs aviva surely they don't have the exact same pound for pound results, so that's what I'm trying to compare. If for example i looked at the last 5 years and saw that pensionbee actually had a better return that would be a valuable consideration for me.

dilby

gm0 said:

You are I am afraid confusing the bag with what is inside it.  The investments perform. Pension wrappers from different companies are just a bag to hold them in - some a bit cheaper than others but essentially pretty "neutral" as to the outcome. 

Comparing investment funds with each other or with categories at different levels of risk can be done on the trustnet website.  You need to create an account and can compare fund with fund or a particular investment (set of funds of your choosing) against stock market indexes or an Investment Association Category.  So a "Cautious" category or some other level which corresponds to the average of a list of similar options.  A "how is it doing in the pack" view.

A simpler way to look at it (as the trustnet tools have a bit of a learning curve) would be to look up the historic performance of say - the Vanguard Life Strategy funds.  VLS20,40,60,80,100 over recent years and then compare what your reports show you with these five.  If you understand what your current holding contains roughly - % equities % bonds %other things then you can take a simple view of whether it "performs"  similarly to investments at a similar risk tier. 

Not precise but a helpful first step nonetheless

Thanks. In regards to the last sentence '  If you understand what your current holding contains roughly - % equities % bonds %other things then you can take a simple view of whether it "performs"  similarly to investments at a similar risk tier. ' I think you are saying this in order to compare like for like. But I suppose because I have no control over how its invested then I'm thinking that it's fair to compare an overall pound for pound return. If my aviva makes 2% in 3 years but the vanguard option makes 10% then i'm not really concerned what's in it; does that make sense or am I missing something?

eskbanker

dilby said:
I have no control over how its invested

Are you sure about that?  Even if you can't change how it's invested (unlikely), you should still be able to see how it's invested and ascertain the risks, etc.  Isn't there an online portal, or even annual statements?

dilby said:
I'm thinking that it's fair to compare an overall pound for pound return

Trouble is, there's no such thing as an 'overall pound for pound return' in the way you seem to want.

Let's say that, depending on which investments are held within it, an Aviva pension may have returned between 0% and 50% over the last five years.

Depending on which investments are held within it, a PensionBee pension may have returned between 0% and 50% over the last five years.

The numbers are made up, and there may be detailed variances at platform charging level, but the principle holds that comparison needs to be made at the right level....

MallyGirl

If you look at PensionBee it has 7 high level plans
https://www.pensionbee.com/plans
you would need to pick one of them when you opened a pension with them.

Aviva has many more than 7 funds/plans to choose from, and only you can say what you have today. It should tell you in the annual documentation.
you would need to compare like with like

Prism

I believe that Aviva send out yearly paper reports on your pension. If so then you should be able to see exactly which fund you are invested in and from there begin to do a comparison.

MX5huggy

dilby said:

gm0 said:

You are I am afraid confusing the bag with what is inside it.  The investments perform. Pension wrappers from different companies are just a bag to hold them in - some a bit cheaper than others but essentially pretty "neutral" as to the outcome. 

Comparing investment funds with each other or with categories at different levels of risk can be done on the trustnet website.  You need to create an account and can compare fund with fund or a particular investment (set of funds of your choosing) against stock market indexes or an Investment Association Category.  So a "Cautious" category or some other level which corresponds to the average of a list of similar options.  A "how is it doing in the pack" view.

A simpler way to look at it (as the trustnet tools have a bit of a learning curve) would be to look up the historic performance of say - the Vanguard Life Strategy funds.  VLS20,40,60,80,100 over recent years and then compare what your reports show you with these five.  If you understand what your current holding contains roughly - % equities % bonds %other things then you can take a simple view of whether it "performs"  similarly to investments at a similar risk tier. 

Not precise but a helpful first step nonetheless

Thanks. In regards to the last sentence '  If you understand what your current holding contains roughly - % equities % bonds %other things then you can take a simple view of whether it "performs"  similarly to investments at a similar risk tier. ' I think you are saying this in order to compare like for like. But I suppose because I have no control over how its invested then I'm thinking that it's fair to compare an overall pound for pound return. If my aviva makes 2% in 3 years but the vanguard option makes 10% then i'm not really concerned what's in it; does that make sense or am I missing something?

If the Aviva is invested defensively and only falls 5% in year 4 and rises 5% in year 5 but Vanguard falls 40% in year 4 and rises 30% in year 5 which is better now? 

AlanP_2

If you want high returns, which you seem to imply as you are looking for a pension that has higher returns compared to another one you are probably also going to see higher falls in value when markets have down periods.

A meaningful comparison can only be done on a like / like basis or at least similar.

Take 2 absolute extremes:

Pension A - The Meta Pension. It only invests in Facebook shares, over the last 10 years it has had fantastic returns. Oh, by the way it dropped over 26% yesterday.

Pension B - Run of the Mill Pension. Steady approach just looking to grow the pot gradually and minimise dramatic swings in value.


Pension A will have higher returns than Pension B at the moment. But if FB / Meta shares fall another 25% in the next few weeks and then another 25% in 3 months time when they announce more results which one will be best?


What do you want from a pension - the highest return possible or something that will be more stable but possibly lower returns?


I would suspect that at least one of the PensionBee offerings has a higher rate of return than your current one and at least one of the PensionBee offerings has a lower rate of return but not sure that helps you to decide between PensionBee and Aviva.

It is like asking which supermarket is best for me and then comparing Aldi own brands to Waitrose branded products and saying well Aldi is cheaper. No surprise, but it hasn't helped you to decide which one is best for you.

Thrugelmir

MX5huggy said:

dilby said:

gm0 said:

You are I am afraid confusing the bag with what is inside it.  The investments perform. Pension wrappers from different companies are just a bag to hold them in - some a bit cheaper than others but essentially pretty "neutral" as to the outcome. 

Comparing investment funds with each other or with categories at different levels of risk can be done on the trustnet website.  You need to create an account and can compare fund with fund or a particular investment (set of funds of your choosing) against stock market indexes or an Investment Association Category.  So a "Cautious" category or some other level which corresponds to the average of a list of similar options.  A "how is it doing in the pack" view.

A simpler way to look at it (as the trustnet tools have a bit of a learning curve) would be to look up the historic performance of say - the Vanguard Life Strategy funds.  VLS20,40,60,80,100 over recent years and then compare what your reports show you with these five.  If you understand what your current holding contains roughly - % equities % bonds %other things then you can take a simple view of whether it "performs"  similarly to investments at a similar risk tier. 

Not precise but a helpful first step nonetheless

Thanks. In regards to the last sentence '  If you understand what your current holding contains roughly - % equities % bonds %other things then you can take a simple view of whether it "performs"  similarly to investments at a similar risk tier. ' I think you are saying this in order to compare like for like. But I suppose because I have no control over how its invested then I'm thinking that it's fair to compare an overall pound for pound return. If my aviva makes 2% in 3 years but the vanguard option makes 10% then i'm not really concerned what's in it; does that make sense or am I missing something?

If the Aviva is invested defensively and only falls 5% in year 4 and rises 5% in year 5 but Vanguard falls 40% in year 4 and rises 30% in year 5 which is better now? 

Aviva.