Nest pension

MakingUpGround

Hello, does anyone have any guidance on Nest pensions? 
I have a part time job which pays into a Nest pension.  Me at 5% and employer at 3%. 
It's been going for 2 years. They will not contribute into any other schemes so I am stuck with it. 
There is limited choice for investment choice, I think only a choice of 7. 

Total contributions to date is £2318.  as of this morning my pot stood at £2324.  So basically £6 made in 2 years. 
I'm currently in the ethical fund. The whole thing seems abit of a waste of time at the moment. I'm trying to make up for some lost ground previously and wondering whether to forgo my employers contributions and stop adding to this one and use my money to either invest elsewhere or buy additional NHS pension as I am employed by the NHS part time too?  

MakingUpGround

It may be that it's just the current climate which has wiped out any previous gains. My concern re buying additional NHS pension is hubby only gets a 1/3 if I die. And because he has no private pension due to not working and ill health I feel its better to have pensions where I can pass the total value left over to him. I have 20 year to retirement  

Dazed_and_C0nfused

Whatever you do it shouldn't be leaving Nest.

If you did you would be giving free money so at the very least make sure you get the 3% from your employer.

With additional NHS contributions you know what you are getting and there is no investment risk but they won't have as much flexibility as the Nest (defined contribution) pension has.

Having a mix of DB and DC pensions is generally seen as a positive and if you have limited DB pension adding to the NHS one might be the prudent thing to do (whilst still building up a DC pot).

Albermarle

Total contributions to date is £2318.  as of this morning my pot stood at £2324.  So basically £6 made in 2 years. 

On the other hand , 8% of your salary has been going into the scheme and it has only cost you 4% ( 5% minus tax relief) 

So you have gained approx £1150 of free money .

Although Nest charges 1.8% on new contributions ( but only 0.3% ongoing which is cheap) and that has probably had an impact for a relatively new contributor.

dunstonh

Total contributions to date is £2318.  as of this morning my pot stood at £2324.  So basically £6 made in 2 years. 

Sounds about right.    

I'm currently in the ethical fund. 

You would expect long term underperformance in an ethical fund.  So, that doesn't help returns.

 I'm trying to make up for some lost ground previously and wondering whether to forgo my employers contributions and stop adding to this one and use my money to either invest elsewhere 

Or putting it another way, you are wondering whether you should throw away free money from the employer, increase your national insurance and put the money into alternative that will broadly have done the same thing.

The whole thing seems abit of a waste of time at the moment

You may have heard on the news that Russia has invaded Ukraine.  Markets have gone down because of that.     However, from a regular contribution point of view, market falls are a good thing.   So, there is no logic in you saying its a waste of time.    Indeed, you need these negative periods to make more money in the long term.

You only started in 2020.  2020 was a very good year for investments.  However, you had virtually nothing in it at that time to take advantage of it.    2021 was a positive year but slightly under the average of the last 20 years.  2022 YTD is a negative period.

An economic cycle is around 12-15 years nowadays.  In that period, you will see positive years, nothing years and negative years.  You have to average them out over the long term (i.e. at least a whole economic cycle).   Looking at very short term periods in isolation is pointless.

MakingUpGround

Thank you all. Any suggestions on which fund is better with Nest? 

tacpot12

To my mind the Sharia fund is the best fund that NEST has. If I was investing with NEST its where I would have my money. 

Buying additional pension withthe NHS if you can do so should be good value too.

I have lost about 10% of my fund value in the last month due to the war, which means the assets are now worth about what I paid for them four years ago. (But I've also had over £50K in dividends from the assets over that time, so my rate of return is acceptable). I have every confidence that the assets will regain their lost ground when the war is resolved. 

MakingUpGround

Thank you all 

Albermarle

Also the ethical fund is a lifestyle type fund . It adjusts the risk rating to your age /time to retirement . Just in case you were not aware.