Sipp lost £3,777. Yikes - advice please?

travelodger

p00hsticks said:

travelodger said:

 I am an elderly disabled woman bereaved, asking for help.

You describe yourself as elderly - exactly how close to (or by how much over) State Pension Age are you ?

What other pension arrangements, if any, do you have ?

If you are still under SPA, have you got an individual state pension forecast to confirm you are on track to get the maximum state pension you can ? 

Whether it is sensible to be investing in a SIPP, and if so in what sort of funds you should be investing, wil lbe influenced by all these factors.

I am 64. I know that technically that it not "elderly" but I feel elderly because of my disability.

What other pension arrangements, if any, do you have ?

I have been receiving a pension from my employer since I was 60. It's £450 a month plus I get £800 a month in disability benefits and then £450 from self employment paid work. This is ample to live on, as my needs are small. I always have money left over at the end of the month and currently have £5,000 just sitting in my current account. I guess I should use that to buy more stocks and shares but firstly I have to totally believe and trust that the stocks and shares ARE going to bounce back up -- what if THIS TIME they don't? 

 have you got an individual state pension forecast to confirm you are on track to get the maximum state pension you can?

Er, I don't remember ever receiving a "forecast". Would they have sent me a tailor-made one? I have just always assumed I will get whatever the state pension is, when I am 67. 

travelodger

p00hsticks said:

I'd be grateful for any suggestions you have. I'm sorry I am so ignorant about money. I grew up in poverty and I honestly never expected I would have any money to invest. 

p00hsticks

travelodger said:

 have you got an individual state pension forecast to confirm you are on track to get the maximum state pension you can?

Er, I don't remember ever receiving a "forecast". Would they have sent me a tailor-made one? I have just always assumed I will get whatever the state pension is, when I am 67. 

You wouldn't automatically have been sent one in the post, you need to ask for it.

The easiest way is to look it up online, if you either already have (or can pass the necessary ID checks to get) a Government Gateway ID

https://www.gov.uk/check-state-pension

If you can't look it up online then you can print off, fill in and post off an application to get it by post.

https://www.gov.uk/government/publications/application-for-a-state-pension-statement

It's well worth doing because you, like everyone else that started their working lives before the introduction of the new State Pension in April 2016, falls under transitional rules. This means that everyones forecast is different depending on their specific work record, and you may need more or less than the oft-quoted '35 years' NI credits to get the maximum possible state pension.

If your forecast is predicting that you wil lget less than the maximum there may an opportunity to fill in any gaps in your record to increase your predicted amount to the maximum.

And by the way - if you are now 64, then you'll be able to claim your State Pension from your 66th birthday, not your 67th.

Brie

the thing about putting a set amount of money into invests each month is that it means over a number of years your purchase price amounts average out.  So one month maybe your £400 buys 1 share only.  Another month it buys 20.  So you end up with £800 having been paid to buy 21 shares.  So when the price goes up a bit - say £100 - you could then sell your 21 shares and get back £2100 - so a great profit on the £800 invested.

But this does take some nerve to hang on until the price is right to sell.  That's the scarey bit.  But as others have said if you continue to buy now you will be buying at a lower price and when it recovers things will look rosier. 

I do think that you might want to switch to something a bit less risky giving your relative "elderliness" (say a fellow 64 yo).  I was going to ask about this myself when I saw others comments about the high risk of what you are in currently.  There's nothing the matter with having a bit of diversity in your investments which is why a mixed fund is good as a starter.

Do go on to the Gov.uk site to get a pension forecast.  It's possible that you are missing a contribution that you can still catch up with to make a better SP when you hit 66/7.   

Brie

Oh - also suggest you get a pension forecast from your work pension too.  You should be getting a yearly estimate of what you will receive but I found it useful to ask for a specific date - say 1st Sept 22 - so that you get all the detailed information.  Then you will be better able to budget what life will be like when you hit retirement.

Double check your normal retirement date - it's always possible that you might be able to already receive your pension - it's likely to be either at 60 or 65.

dunstonh

I don't understand the different choices available for SIPPs at Vanguard. LS 80 was suggested to me on this board so I just went for that. What would be lower risk, please?

You shouldn't act on investment suggestions on this board.  You have no idea if the suggestion is right for you.  It may be right for the person that suggested it.  It may be wrong for them and they don't realise it.   Either way, it doesn't matter as it is what is right for you that matters.   By all means, look into suggestions but don't assume that they are right for you.

As it stands, it appears you cannot handle the volatility of the higher risk fund you have. 

I guess it also relies on FAITH.... that stocks and shares WILL go back up. Seasoned investors currently seem to be 100% certain that they definitely will, but to newbies like me, who haven't been watching them go up and down over decades, it is so alarming to see losses of thousands.

It's not decades.  It is centuries of history.

But I am not paying into that one any more. Hence my question was about Vanguard SIPP - should I keep sticking more money in after I have already lost nearly four grand in seven months?

Absolutely you should carry on paying.  Regular contributions thrive in periods like this.

p00hsticks

travelodger said:

p00hsticks said:

travelodger said:

 I am an elderly disabled woman bereaved, asking for help.

You describe yourself as elderly - exactly how close to (or by how much over) State Pension Age are you ?

What other pension arrangements, if any, do you have ?

If you are still under SPA, have you got an individual state pension forecast to confirm you are on track to get the maximum state pension you can ? 

Whether it is sensible to be investing in a SIPP, and if so in what sort of funds you should be investing, wil lbe influenced by all these factors.

I have been receiving a pension from my employer since I was 60. It's £450 a month plus I get £800 a month in disability benefits and then £450 from self employment paid work.

For the purposes of how much you are allowed to put into a pension, only the £450 a month self emplyment counts as 'earnings' which explains the discrpancy between your total annual income of £32,000 and why your friend said you would only be allowed to contribute £400 a month.

Brie

Is there somewhere within the company that you work for that financial advice is available?  Many larger companies either have inhouse or outsourced assistance.  There's also assistance available via unions or industrywide organisations. 

p00hsticks

Brie said:

Oh - also suggest you get a pension forecast from your work pension too.  You should be getting a yearly estimate of what you will receive but I found it useful to ask for a specific date - say 1st Sept 22 - so that you get all the detailed information.  Then you will be better able to budget what life will be like when you hit retirement.

Double check your normal retirement date - it's always possible that you might be able to already receive your pension - it's likely to be either at 60 or 65.

You were probably typing as the OP posted, as they've stated above that they are already in receipt of their works pension and have been since they turned 60 (they're now 64).  

Aminatidi

travelodger said:

Aminatidi said:

I think it's worth mentioning that whilst LS80 might be too much risk travelodger being in a lower risk LS60 or LS40 wouldn't have been significantly better the last few months would it?

There haven't been many safe places even for cautious investors have there?

I can understand the alarm if you're not used to seeing investments lose money and you randomly login and see you're 15% down.

I think it's something you get used to but never like even if you manage to adjust your attitude to seeing it as a buying opportunity.

Thank you Aminatidi, your reply is kind. You make me feel better by pointing out that wherever I had put this money, it would have dropped in value. 

I did indeed log in randomly and I was indeed alarmed and threw a wobbly.

As a relatively new investor who does not understand finances at all, and suffers from a kind of "financial dyslexia", it is indeed a struggle to see this as a "buying opportunity". Before posting I read a few other threads (in case my question had already been answered) and I saw posters saying that it goes against instinct to buy more when you have seen your investments drop, but to seasoned investors it makes perfect sense. I saw it rendered as buy low, sell high. Anyone selling now is selling low and later will be buying high.

I guess it also relies on FAITH.... that stocks and shares WILL go back up. Seasoned investors currently seem to be 100% certain that they definitely will, but to newbies like me, who haven't been watching them go up and down over decades, it is so alarming to see losses of thousands. I also have a stocks and shares ISA with HL and that has lost £60,000. When I log in and look, my stomach goes into a knot and I feel sick. But I am not paying into that one any more. Hence my question was about Vanguard SIPP - should I keep sticking more money in after I have already lost nearly four grand in seven months?

I think if there's something you should be glad of it's that you're invested in something that is pretty "passive" rather than having put all your money into (example) Scottish Mortgage or some other funds that people often put money in because they've done really well historically.

I would tend to agree that with hindsight it looks like you didn't appreciate either the level of volatility with LS80 or your own appetite for volatility but you are where you are right now.

I'd have a really good think about your own appetite for volatility and consider what you think it might really be?

When do you need your investments?

Do you have a cash buffer so you're not a forced seller?

The difficulty is that as I said right now it's been an awful time for almost all asset classes so even if you'd been more cautious in your approach you'd most likely still be sitting on a loss but possibly a smaller loss.

My own mum is a little older but there are some parallels perhaps

She's in LS40 so a more cautious product but the chart below might give you some comfort in that over the past year if you'd been in a more cautious product from the LifeStrategy range you'd actually be worse off than you are.

It's been a strange and difficult few months.