Should I be worried

dunstonh

anfirmor said:

Ah. It’s probably the discount on management fees that ceased when I left that company. I know that was in my T’s & C’s. My poor explanation. 

That used to be something that could happen but it was banned in April 2016

anfirmor

Regarding management fees discount. It was in my terms and conditions from 2011 after yet another takeover. Interesting how little info the American owners passed on to the workforce. I had no idea about making discount deals illegal in 2016. Only left their employment last August. 

Yes the fund that has dropped by 5% is with Reassure and would be considered the higher risk fund. The low risk company pension has suffered the most at over 20% at the time of posting. Thank you for the clarification regarding 50/50 and bonds taking a bigger hit. I have been concerned about the safer fund seeming to be anything but. That is a great explanation.

This is my first post on this forum and I’m humbled by the kind responses.

Albermarle

and bonds taking a bigger hit. I have been concerned about the safer fund seeming to be anything but. 

It is an unusual scenario affected by various economic issues coming together at once. We have had some posters approaching retirement, with all their money in supposedly safe funds, seeing 25% drops. Whilst people invested in higher equity/risk funds have seen some ups and downs but nothing like this level of drop overall. 

I moved that fund to a fund that ReAssures risk indicator claimed was a move from a low risk fund to a medium low risk fund, which is my current fund. So by no means super high risk according to them.

Normally pension providers would not offer any very/super high risk investments, such as individual company shares, bitcoin, unregulated investments etc . High risk in this context really means high volatility possible in the short to medium term, rather than any chance of total loss.

This is my first post on this forum and I’m humbled by the kind responses.

Browsing through the forum can be informative and maybe worth a few hours of your time. Feel free to ask more questions, just try to add as much detail as possible .

anfirmor

Thanks Albermarle. A sound explanation

Just checking the web to see why bonds are suffering so badly. Trying to enlighten myself a little.

It seems that inflation is outstripping the average 3% return in bonds. So if inflation forecasts well into double figures is there any short term hope for a recovery of the 50/50 scheme? Or is it a case of hold tight for a few years. I suppose what I’m asking is, with the world turned upside down as it is are there any predictions for recovery of bonds. Will there returns improve to close the gap on inflation?

I did consider switching the Aegon scheme to Reassure back in February but held off based on my presumption that the Aegon scheme was safe. I was starting to see a divergence in those plots then.

At 58 my plan was to take both at 60 or 61. As one of the 300,000 people who’s work situation has changed dramatically through covid (the government has lost them!) I was preparing to see those funds as differed earnings until, if I’m spared, I reach state retirement age. I’ll always have to work in some small way. 

Any hope of a recovery I'm that time span?

at least my dad drummed into my head the importance of paying your stamp, as he called it and I did so when I was self employed from my 20’s to my 40’s and paying only a meagre amount into what became the Reassure scheme.

when I went full time the company was GE. I lasted 12 weeks in a DB scheme. Then they sold the factory and any hope of ever seeing a final salary pension went down the suff with it. 

Hey Ho!

Albermarle

anfirmor said:

Thanks Albermarle. A sound explanation

Just checking the web to see why bonds are suffering so badly. Trying to enlighten myself a little. Just be aware that the bond market is a mystery to most people, even people who invest regularly find it more difficult to understand than equities/share markets ( including me !) 

It seems that inflation is outstripping the average 3% return in bonds. So if inflation forecasts well into double figures is there any short term hope for a recovery of the 50/50 scheme? Or is it a case of hold tight for a few years. Probably this  I suppose what I’m asking is, with the world turned upside down as it is are there any predictions for recovery of bonds. Yes and also predictions things will get worse, we will only know with hindsight, Will there returns improve to close the gap on inflation? Not with inflation where it is, but hopefully it will come down again later next year.

I did consider switching the Aegon scheme to Reassure back in February but held off based on my presumption that the Aegon scheme was safe. All investments can go down as well as up. I was starting to see a divergence in those plots then.

At 58 my plan was to take both at 60 or 61. As one of the 300,000 people who’s work situation has changed dramatically through covid (the government has lost them!) I was preparing to see those funds as differed earnings until, if I’m spared, I reach state retirement age. I’ll always have to work in some small way. 

Any hope of a recovery I'm that time span? Unlikely that bonds will recover until inflation dies down as I understand it. However equities are more unpredictable.

at least my dad drummed into my head the importance of paying your stamp, as he called it and I did so when I was self employed from my 20’s to my 40’s and paying only a meagre amount into what became the Reassure scheme.

when I went full time the company was GE. I lasted 12 weeks in a DB scheme. Then they sold the factory and any hope of ever seeing a final salary pension went down the suff with it. 

Hey Ho!

Sorry for lack of certainty .

xylophone

Sorry again. I had a pension set up through HSBC (Midland Bank as it was) that they transferred to ReAssure. 

Thanks - the reference to HSBC had me wondering whether there had ever been involvement with the HSBC DB scheme and perhaps a transfer out to a S32 policy.

at least my dad drummed into my head the importance of paying your stamp, as he called it and I did so when I was self employed from my 20’s to my 40’s and paying only a meagre amount into what became the Reassure scheme.

Have you obtained a state pension forecast?

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

What exactly does it say?

dunstonh

Thanks - the reference to HSBC had me wondering whether there had ever been involvement with the HSBC DB scheme and perhaps a transfer out to a S32 policy.

HSBC Life was sold off many years ago. That is how it ended up with ReAssure.     Most of the HSBC Life policies are pretty basic and on old-fashioned terms and can be improved upon by modern pensions.  e.g. 1% pa. stakeholders orf 1.5% p.a. PPPs  vs the 0.3-0.5% more typical with modern plans.

anfirmor

Yes I’ve checked my state pension forecast and I have enough years in the bag for a full state pension, when I get there. One year missing since 1983 when I was enjoying myself abroad. I was rather late getting going with a private pensions and when I went full time in 2009 I rammed as much into the companies Aegon scheme as I could afford.  Ever managed to put more than £50pm into the HSBC/Reassure pot. So it’s a tad frustrating to see the drop of the company scheme (another 1% this morning). Even more infuriating that the same company had me working for them on a self employed basis for 12 years before I was taken on as an employee. It was only when GE were about to take over the company in 2009 that they tied me in. Probably didn’t want the IR looking at the number of us who had been been kept as self employed for so long. Three months after GE purchased they sold it on, hence my 12 weeks of DB pension. No idea what happened to my contributions into that.

I digress. 

So in that respect of state pension I’m luckier than a lot of people. I’ve seen a number of posts here from worried people who didn’t pay their stamp. A legacy of the explosion in the number of self employed during the 80’s & 90’s I would suppose. I guess always the first pension pot to keep funded is the state pension. Am I right that making up shortfalls has been seriously knobbled, or will be next April?

No apologies necessary for the weird state of, supposedly, safe bonds. I’m grateful for the help.

Audaxer

anfirmor said:

At 58 my plan was to take both at 60 or 61. As one of the 300,000 people who’s work situation has changed dramatically through covid (the government has lost them!) I was preparing to see those funds as differed earnings until, if I’m spared, I reach state retirement age. I’ll always have to work in some small way. 

When you say your plan was to take both pensions in the next few years, do you mean by drawdown, and for the funds to last throughout your retirement, i.e. not just to State Pension age? If so, how much in percentage terms do you plan to drawdown each year from these pension funds?

anfirmor

No I didn’t consider drawdown. My wife will be eligible for state pension in two years and so I considered taking lump sums and annuities from both private pensions at about the same time.

We have no mortgage or debts, some savings and are happy to live within our means. Both of us now work in a cottage industry way, from home at minimal expense or overheads and are happy to continue to do so. Whatever skill set we both have we will be using in a way of our choosing. I really don’t want to return to the failed experiment of working in industry with the stupid amount of travelling I did just getting to work. I can’t think of any of my ex colleagues who are happy. Bad times. 

I suppose I could wait until I’m 67 and get a bit more but why? 67 is an offensive state retirement age compared to many of our neighbouring countries as is one of the lowest state pensions in Europe.

But, for me, I can’t see any dramatic way of improving my forecast so I’ll cut my cloth as they say. We’re luckier than many but not in the DB club.