Workplace Pension Increase

Racksim2000

I have through my work a workplace pension, recently it has lost money through recent events.  I would like peoples thoughts and advice on whether to keep paying my current percentage or to increase my payment percentage.  As it is losing money at the moment if I increase my percentage paid will it just lose more money or does it mean for example the pension will be buying more funds cheaper at this time and once things go back to normal it will make more.  Hope this makes sense, thanks for your answers.

400ixl

How long until you plan to retire?

Marcon

Racksim2000 said:

I have through my work a workplace pension, recently it has lost money through recent events.  I would like peoples thoughts and advice on whether to keep paying my current percentage or to increase my payment percentage.  As it is losing money at the moment if I increase my percentage paid will it just lose more money or does it mean for example the pension will be buying more funds cheaper at this time and once things go back to normal it will make more.  Hope this makes sense, thanks for your answers.

Depends on the underlying funds where your pension savings are invested. If you are in some sort of unitised arrangement, then you are spot on: if the price has dropped you'll get more units for your money.

If you're not sure (join quite a lot of the rest of the world!), if you give the name(s) of the funds where your pension is invested, someone here will be able to give a helpful answer. It does need to be the actual funds - just saying 'Standard Life' or 'The XYZ Group Personal Pension', for example, won't be enough information.

Albermarle

nd once things go back to normal 

In the global economic and political arena ( which affects investments) there is no such thing as normal, and there never will be.

What is important is that despite numerous and regular adverse events over the last 200 years, that investments have outpaced inflation, most of the time.  We all hope that this trend continues and nothing happening today would indicate that it will not. Although the exact time scales involved are not known.

Racksim2000

Thanks for the replies, I am aiming to hopefully in no more than 10 years.

retiringtoosoon

If you’re hoping to last less than 10 years I’d be looking to spend rather than save tbh. All the best 

Albermarle

retiringtoosoon said:

If you’re hoping to last less than 10 years I’d be looking to spend rather than save tbh. All the best 

I think the poster meant retire in no more than 10 years.

Racksim2000

Marcon said:

Racksim2000 said:

I have through my work a workplace pension, recently it has lost money through recent events.  I would like peoples thoughts and advice on whether to keep paying my current percentage or to increase my payment percentage.  As it is losing money at the moment if I increase my percentage paid will it just lose more money or does it mean for example the pension will be buying more funds cheaper at this time and once things go back to normal it will make more.  Hope this makes sense, thanks for your answers.

Depends on the underlying funds where your pension savings are invested. If you are in some sort of unitised arrangement, then you are spot on: if the price has dropped you'll get more units for your money.

If you're not sure (join quite a lot of the rest of the world!), if you give the name(s) of the funds where your pension is invested, someone here will be able to give a helpful answer. It does need to be the actual funds - just saying 'Standard Life' or 'The XYZ Group Personal Pension', for example, won't be enough information.

This is what I have found.

Top Holdings

BLACKROCK ACS US EQTY TRACKER
ACS CLIMATE TRANSITION WORLD EQUITY FUND
BLACKROCK ACS UK EQUITY TKR
SSGA AUT EUROPE EX UK EQUITY TRACKER FUND
SSGA MPF EMERGING MARKETS INDEX
ISHARES GLOBAL PROPERTY SECURITIES
SSGA AUT ASIA PACIFIC EX-JAPAN EQUITY TKR
ABERDEEN GLOBAL CREDIT FUND
BLACKROCK ACS JAPAN EQTY TRACKER
SCOTTISH WIDOWS ESG UK CORPORATE BOND TRACKER FUND

US Equities
International Equities
UK Equities
Global Fixed Interest
Property Shares
Japanese Equities
UK Fixed Interest
Canadian Equities
Swiss Equities
French Equities
American Emerging Fixed Interest GCC Fixed Interest
Australian Equities
Money Market
Other

gm0

Cyclical volatility is good for your pound cost averaging of purchase.  So scary overshoots across the median long term average return line are good for the buyer of units and bad for the (forced) seller of units.   So the invested in drawdown pensioner cares about sequence of return rather more than you do at this stage.

So short term volatility doesn't justify "upping" or even worse reducing steady inputs to pension. 

Clearly you *can* elect to save more when prices fall.  And this may look good or bad over different time horizons thereafter. 

Ultimately leading if the future co-operates to a better pot, a lower WR % in drawdown, a higher pension at a given level of risk.
Though your investments may (likely will) fall significantly at various times between now and then. 

 Your circumstances now on discretionary spare income and your goals in terms of pot saved/income needed/desired later will drive savings rate / "are you saving enough" - not short term market performance or volatility.

snowlaser

Racksim2000 said:

I have through my work a workplace pension, recently it has lost money through recent events.  I would like peoples thoughts and advice on whether to keep paying my current percentage or to increase my payment percentage.  As it is losing money at the moment if I increase my percentage paid will it just lose more money or does it mean for example the pension will be buying more funds cheaper at this time and once things go back to normal it will make more.  Hope this makes sense, thanks for your answers.

I understand your question: you're saying that values have fallen so does this mean it's a good time to buy more, or might they fall again?

No-one can answer that for sure, because no-one knows the future for sure.

The things I would throw out there (very much as thoughts and NOT advice) is:

- In general, buying after a big fall is much better than buying after a big rise.  This is not to say there won't be ANOTHER big fall, that is always a risk, but I feel happier putting my money in a pension after it's just gone down 20% than up 20%.

- I'd challenge your phrase "once thing go back to normal".  In a way, there is never a "normal".  Markets go up and down.  Things happen and things change.  Over the long run 10+ years you would expect your pension pot to rise, but I don't think it's ever a good idea to expect things to go "back to normal" as every year and decade is different to the last.