Pension Pot

2Sheds

Albermarle said:

If it was £12,000 on a £25,000 pot it would be abnormal.
If it is say £12,000 on a £80,000 or £100,000 pot, then it is perfectly normal in the current markets

My Scottish Widows small pension from previous employment was £32,700 Sept 21, by Feb 22 £29,700 and yesterday was £22,000.

2Sheds

Down another £700 !!!!!!

Still the 1p tax reduction will help

AndyGB93

It also appears to impact the transfer values of DB schemes.

I've started to get a transfer out value for my old Lloyds final salary pension in Feb each year as I get closer to 55 (54 in December in this year).

In Feb 2021 it was worth £645,264, Feb 2022 £668,900 and I did one on 21st Sep 2022 it is had dropped by approx £200,000 to £446,474.

Morayjag

My Scottish Widows Portfolio 4 fund stood at £121,000 at Jan 2022 now it is £98,000 This seems to me a abnormal sum for me even in the current climate. Any thoughts on this. I am retired and take a small monthly drawdown.

[Deleted User]

Morayjag said:

My Scottish Widows Portfolio 4 fund stood at £121,000 at Jan 2022 now it is £98,000 This seems to me a abnormal sum for me even in the current climate. Any thoughts on this. I am retired and take a small monthly drawdown.

The drop is aligned with the market returns for a bond-heavy fund.  Lucky that a lot of these bonds are foreign or could have been worse. 

Cus

AndyGB93 said:

It also appears to impact the transfer values of DB schemes.

I've started to get a transfer out value for my old Lloyds final salary pension in Feb each year as I get closer to 55 (54 in December in this year).

In Feb 2021 it was worth £645,264, Feb 2022 £668,900 and I did one on 21st Sep 2022 it is had dropped by approx £200,000 to £446,474.

Is it some comfort knowing that the reduced amount is representative of the cost to provide you an annuity at the agreed amount?

dunstonh

It also appears to impact the transfer values of DB schemes.

That is because gilt yields is on of the impacts in calculating the cost of the liability.   So, this is one of the positives for schemes.

In Feb 2021 it was worth £645,264, Feb 2022 £668,900 and I did one on 21st Sep 2022 it is had dropped by approx £200,000 to £446,474.

Your CETV possibly peaked around October 2021 and would probably have gone through 700-750k.  CETVs are likely to have fallen again over the last week.    Annuity rates are up again though today.

My Scottish Widows Portfolio 4 fund stood at £121,000 at Jan 2022 now it is £98,000 This seems to me a abnormal sum for me even in the current climate. Any thoughts on this. I am retired and take a small monthly drawdown.

That is not an abnormal sum to drop.  Smaller than the 2020, 2008 and 2000-2002 drops but comparable to 2015/16 and 2018 drops.

you may wish to look at annuities as they have benefitted from the increase in gilt yields and for many people, the increase in the annuity rate could be greater than the loss on their portfolio.  Or you just do what people should do every time one of these drops happens.   Wait it out for the recovery.   If you are in your 60s and using drawdown then you would expect a 20% drop around once every 5 years.  So, the fact you have one now shouldnt be a surprise.

handful

Deleted_User said:

Morayjag said:

My Scottish Widows Portfolio 4 fund stood at £121,000 at Jan 2022 now it is £98,000 This seems to me a abnormal sum for me even in the current climate. Any thoughts on this. I am retired and take a small monthly drawdown.

The drop is aligned with the market returns for a bond-heavy fund.  Lucky that a lot of these bonds are foreign or could have been worse. 

I transferred a pension from L&G which was a Lifestyle pension with about 40% binds IIRC and bought Vanguard 100% equities after deciding to increase my equity holdings. This was in March and the Vanguard has dropped 5.31% in that time. Probably more luck than judgement, I would imagine less of a drop than I would have had holding on with L&G?

SouthCoastBoy

I think the secret is to have a decent cash pot, for example I have a 60:40 equities:cash split and therefore have enough cash for around 10 to 12 years (depending on inflation and interest rates). I am planning to retire within the next 2 years so between 58 and 60 and due to my cash position I am going to initially run it down to a 80:20 split unless there is remarkable equities performance. This gives me more flexibility around the sequence of returns conundrum

Albermarle

handful said:

Deleted_User said:

Morayjag said:

My Scottish Widows Portfolio 4 fund stood at £121,000 at Jan 2022 now it is £98,000 This seems to me a abnormal sum for me even in the current climate. Any thoughts on this. I am retired and take a small monthly drawdown.

The drop is aligned with the market returns for a bond-heavy fund.  Lucky that a lot of these bonds are foreign or could have been worse. 

I transferred a pension from L&G which was a Lifestyle pension with about 40% binds IIRC and bought Vanguard 100% equities after deciding to increase my equity holdings. This was in March and the Vanguard has dropped 5.31% in that time. Probably more luck than judgement, I would imagine less of a drop than I would have had holding on with L&G?

Yes it was very probably a good move. However be aware that UK investors in global equity funds have been helped by the drop in the Pound, as the majority of the holdings in the fund will be priced in Dollars.
If the Pound were to improve against the Dollar, your fund will drop, even if markets are stable.