Pension Pot drop.

orbitalforest

Hi , I'm not vey good at understanding all financial goings on but i'm just a bit concerned about my pension pot . I recently transferred from one (the Peoples Pension) to another (St Jame's Place) and then paid in a lump sum of 20k taking my total to around 56k however within a matter of days it had dropped rapidly by 1.8k after the trouble with the U.S banks and Credit Suisse , a couple of weeks on it is now nearly 2k lower from where i started .
Am i right to be concerned about it dropping almost 2k in my first two weeks with my new pension provider or is it just bad timing with the bank collapses and over time will slowly recover ? I'm just worried it's going to fritter away to nothing at this rate .

Albermarle

Firstly to be clear your pension has not gone down as such, it is the investments within the pension that have gone down. 
Investments go up and down all the time and investing is a long term game. What happens within a space of a few weeks or even a year is not that important, normally the long term trend should be up. The chance of it frittering away to nothing is approximately zero .

Perhaps the more obvious question, is why did you transfer from a simple cheap pension provider ( like Peoples Pension) to a very expensive provider, where you are now probably locked in with them for years ?

msallen

The drop is just bad timing as you say, and nothing to worry about. However your choice of St James Place is concerning - they are very expensive to run, and also have exorbitant exit fees. 

orbitalforest

Yes after doing some research (wish i'd done it earlier) i'm regretting switching to SJP , i'd heard a few negative things about TPP so was looking to move but it looks like i didn't choose too wisely. I'm probably best not checking my account every day then , it's just because i have the app handy as i never even worried about it before .
What is my best exit strategy with SJP ? Should i take the exit fee hit and get out as early as possible or ride it out for a frew years and then switch ? I appreciate the advice by the way , i'm pretty green with all this kind of crap.

TadleyBaggie

I switched to a new platform in November (not SJP!) and had seen a steady gain on both my SIPP and ISAs, however the banking issues over that last week or so have almost wiped out those gains. Just bad timing on your part unfortunately.

Linton

Just unlucky timing. 4% is a relatively small drop. Investments are for the long term, certainly 5 years+ and preferably 10-15 years+.  What happens in a couple of weeks is irrelevent. As long as you are invested broadly in a wide variety of shares and other investments your portfolio cannot dwindle to nothing, or if it did that would indicate the end of the world as we know it with the state of your investments being amongst the least of your concerns.

Prices may recover quickly or slowly or fall further in the short term but as long as companies across the world are making profits you should expect an underlying upward trend.

dunstonh

. I recently transferred from one (the Peoples Pension) to another (St Jame's Place)

From a cheap pension to one of the most expensive on the marketplace.     Would love to know how that was justified.

a couple of weeks on it is now nearly 2k lower from where i started .

So, a very small drop on the amounts involved and within normal volatility.

Am i right to be concerned about it dropping almost 2k in my first two weeks with my new pension

No, you are not right to be concerned.   It is just normal zig zagging that occurs every day.    

I'm just worried it's going to fritter away to nothing at this rate .

Theoretically possible if there was Armageddon but you wont care about the pension if that was the case.  

When your Peoples Pension was going down, did you worry about that?  (drops in 2022 were far greater than the drops in the last week)

Zig zagging in an upward direction is more or less how it works.  Sometimes a drop may only last a few weeks. Sometimes a few months.  Less common is a few years but it will happen.   There is no point worrying about something that is going to happen again and again and is normal.  

 i'd heard a few negative things about TPP

At certain points they can be a pain but its not always their fault.   For example, we had an issue with a transfer out from them and they wouldn't transfer it.     It was down to the employer not letting them know that the person had retired and was no longer an active member.   The rules prevent TPP from transferring it.   I know what I am doing and can apportion blame correctly but a consumer could easily blame TPP and give a bad review.   
   

What is my best exit strategy with SJP ? Should i take the exit fee hit and get out as early as possible or ride it out for a frew years and then switch ? 

We have transferred out with people within the cost tie in period to cheaper options.   You are balancing the high annual cost against the exit charge.  i.e. staying in paying nearly 2% a year (if you use the full costs method) vs 0.3% a year. 1.7% a year can exceed the exit charge.

Albermarle

What is my best exit strategy with SJP ? Should i take the exit fee hit and get out as early as possible or ride it out for a frew years and then switch ? 

You could have a look at the paperwork and see what charges you are paying. Even within SJP they may have cheaper options.

Or talk to them . I think at least they are easy to contact ( should be at those prices !(

orbitalforest

 My accountant recommended someone for my pension when i said i wanted to pay a lump sum in to bring my tax bill down a bit , SJP wasn't even mentioned at that stage he was just a wealth management advisor who must be a broker for them , like i said i'm not very good with all this sort of stuff hence coming on here hoping to be pointed in the right direction.
I had no idea if a 2k drop was normal or not so again hence my initial concern.
I never really tracked my TPP so never had anything to worry about , the only reason i knew the SJP had dropped was because i was checking the app each day , wish i hadn't installed it now !
At least after the replies i've had i can stop worrying about my pot going up or down but perhaps look at getting myself out of SJP .

orbitalforest

Looks like they charge 6% for exit within 1 year , dropping 1 % each year until no fee at 6 years , am i better off leaving it for now or still getting out ?
Not really sure i want to be putting too much more money in that fund to be honest after hearing about their fees.

Pat38493

orbitalforest said:

 My accountant recommended someone for my pension when i said i wanted to pay a lump sum in to bring my tax bill down a bit , SJP wasn't even mentioned at that stage he was just a wealth management advisor who must be a broker for them , like i said i'm not very good with all this sort of stuff hence coming on here hoping to be pointed in the right direction.
I had no idea if a 2k drop was normal or not so again hence my initial concern.
I never really tracked my TPP so never had anything to worry about , the only reason i knew the SJP had dropped was because i was checking the app each day , wish i hadn't installed it now !
At least after the replies i've had i can stop worrying about my pot going up or down but perhaps look at getting myself out of SJP .

I would question whether your accountant is acting in your best interests if that is what he was pushing you to do.