Pensionbee decimates my pension pot.

Krakkkers

But I would expect a fund manager to change strategy.
We are going around in circles here though and are never going to agree on this.
I was not the OP here but I have an expectation that a professional should always outperform the market and others don't.

dunstonh

LV_426 said:

dunstonh said:

LV_426 said:

dunstonh said:

LV_426 said:

Can I ask what happens to those in retirement, if the market dips like this? Do you just accept the hit and erosion of your fund value, or are people invested in more stable, but lower growth funds, post-retirement? 

There is no "if".   It is "when".    These dips and far worse dips are always coming.  You typically see at least one large drop every 5 years.  And it could be that you see 2-3 years of negative years in a row and then have 7 positives.

You know they are coming and because you know they are coming, you don't spend all the gains you get in positive years.  You average out the ups and downs.     Many people maintain a cash float in retirement to see them through negative years and replenish the cash float in positive years (and with dividends/distributions).

Makes sense, I was just interested in the strategies people use to manage income in retirement. I suppose market volatility is the price we pay for having more control and access to our funds. Plus we can pass wealth to our descendants. None of this was possible with previous pension arrangements and inflexible/poor value annuities.
In general I think we're in a much better position to manage our retirement incomes. But as we see from this thread, it requires a certain amount of knowledge and realisation to do it yourself.

When the law charged on drawdown, it also changed some of the rules on annuities.  Death benefits can be better than they used to be with annuities.    It is just low interest rates that has held them back. That is now changing and we are starting to see annuities heading towards being viable again.

Interesting. I was under the impression that it cost a lot more to purchase an annuity with enhanced death benefits. But worth keeping an eye on I guess. 

It does cost more but you are starting to see return of capital minus withdrawals to date get to 6% before 70 and RPI rates matching what many consider to the SWR suitable for the UK.

bostonerimus

Krakkkers said:

But I would expect a fund manager to change strategy.
We are going around in circles here though and are never going to agree on this.
I was not the OP here but I have an expectation that a professional should always outperform the market and others don't.

The funds at Pensionbee will have rules about asset allocation and the manager isn't going to diverge from those. It's up to the investor to make changes to their portfolio. This whole thread is an excellent argument for annuities.

[Deleted User]

Krakkkers said:

But I would expect a fund manager to change strategy.
We are going around in circles here though and are never going to agree on this.
I was not the OP here but I have an expectation that a professional should always outperform the market and others don't.

Have you looked at PensionBee funds and materials?  Not one of them is designed to “outperform the market”.  Nor am I seeing any promises to this effect.  When the fund is called “tracker” its deliberately designed to UNDERPERFORM the market by the value of costs. Why on earth would you expect outperformance? 

Its like going to a shop, paying for something that says “chicken” and looks like chicken  and then complaining “it’s not “beef”. 

TadleyBaggie

bostonerimus said:
This whole thread is an excellent argument for annuities...

...for people who don't understand investments and are too tight to afford to pay an IFA for on going advice. Which is why I don't begrudge my IFA for 0.5% annual fee, he makes way better choices than I ever could.

[Deleted User]

TadleyBaggie said:

bostonerimus said:
This whole thread is an excellent argument for annuities...

...for people who don't understand investments and are too tight to afford to pay an IFA for on going advice. Which is why I don't begrudge my IFA for 0.5% annual fee, he makes way better choices than I ever could.

How do you know its good advice? Would you begrudge generously paying for bad investment advice? 

bostonerimus

TadleyBaggie said:

bostonerimus said:
This whole thread is an excellent argument for annuities...

...for people who don't understand investments and are too tight to afford to pay an IFA for on going advice. Which is why I don't begrudge my IFA for 0.5% annual fee, he makes way better choices than I ever could.

An IFA is not an investment manager, but the good ones will provide a buffer between the client and their investments to stop anxiety and foolish mistakes; they might also explain what's going on with the investments. But don't expect an IFA to stop you from losing 10% or 20% in an extended down market.

Workerdrone

I chose the 4plus plan after moving from the tailored plan.  I was told by pensionbee that they aim to get me 4 percent a year growth, instead they loose 14 grand. I'm just a ground worker on minimum wage, so you people who are slagging me off as thick, try helping people like me  I can't afford the prices that these financial consultants charge, so I trust what these pension companies tell me. You all sit there saying this that and the other.

I'm not calling you thick. What the other posters have said about market conditions being unfavourable across the board is true. Personally I am down 10%+ in the past year, but I know its because I've chosen higher risk funds. I put £1300 a month (Sal sac+ employers contribution) into my works pension and its barely moved the needle. It's the same value month on month. The pessimistic part of my brain tells me I've wasted £15.5k, the uninformed part of my brain tells me to panic, sell up and chase something else which seems to be doing well at present. The informed part of my brain (Thanks to all the posters on this forum), tells me things like.

• Its only a paper loss until I act and sell it
• Markets always have drops and corrections
• Markets on a long enough timescale always head upwards
• The stock market is the only place no-one wants to buy when there's a sale on
• I've not wasted £15.5k Ive just bought more units at a cheaper price

When I doubt myself I come on here and present the problem. People always talk sense and keep me on the right track. In a couple of years I will look back on the advice from older wiser heads and be thankful.

I hear what you are saying about approaching retirement as a manual worker on minimum wage. You have me absolute sympathy. You are ready for it, and it's a kick in the teeth when this sort of thing happens to the markets at the wrong time. Have you considered asking your company if there is a less physically demanding role you could move into pre retirement? Companies do have a duty of care to their workers. Especially if you are struggling with a bad back etc. Failing that, have you considered a career move. The labour market is quite awash with jobs now. Something less physically demanding might help. You are clearly not a stupid person. You found your way to this forum so clearly are computer literate.

Just a few modest suggestions. Please don't do anything rash with your funds. Instead focus on how you can make your working situation more tolerable until the markets sort themselves out.

LV_426

Deleted_User said:

TadleyBaggie said:

bostonerimus said:
This whole thread is an excellent argument for annuities...

...for people who don't understand investments and are too tight to afford to pay an IFA for on going advice. Which is why I don't begrudge my IFA for 0.5% annual fee, he makes way better choices than I ever could.

How do you know its good advice? Would you begrudge generously paying for bad investment advice? 

Here's how I judge my financial adviser: I start by approaching someone through a trusted recommendation. I then listen to what they say in their 'sales pitch'. I do my own research so I'm in a better position to judge what they are telling me. Then I make a decision on whether they can reliably advise me.
Fortunately I managed to find someone who fulfils my expectation. His initial recommendation was to do nothing with my investments currently. I respect his honesty, and will definitely ask for, and pay for his advice in the future.

LV_426

bostonerimus said:

TadleyBaggie said:

bostonerimus said:
This whole thread is an excellent argument for annuities...

...for people who don't understand investments and are too tight to afford to pay an IFA for on going advice. Which is why I don't begrudge my IFA for 0.5% annual fee, he makes way better choices than I ever could.

An IFA is not an investment manager, but the good ones will provide a buffer between the client and their investments to stop anxiety and foolish mistakes; they might also explain what's going on with the investments. But don't expect an IFA to stop you from losing 10% or 20% in an extended down market.

Yes there seems to be an expectation in this thread that 'professionals' don't make losses. Clearly that's unrealistic.