How often do you check the value of your pension? And is contributing to a pension simply gambling?

ader42

P00hsticks is right. My SIPP went down more than £100k in 2022 but now it’s back where it was.

Essentially if you invest in what you believe in and know your stuff then volatility can be yawned at if you have the right mind-set. I rarely check the overall pot value but habitually keep an eye on the markets and the stocks I hold most dear. 

Gambling? Spread-betting is gambling but long-term investing in a pension is not gambling. 

Universidad

I think it's a reasonable question as to whether pension investment is gambling. There's uncertaintity, and it superficially shares many of the same traits. And it's certainly possible to gamble within the sphere of pensions, even if not all pensions are gambling.

I think there are two great reasons given so far why pensions are not, intrinsically, gambling.

The first is that the odds are in your favour. You're not betting against the house. In a sense, you are the house. You can lose from day to day, but over time it's very unlikely that you're not going to win. And the house isn't considered to be gambling, even if they are proximate to it.

The second is that, ultimately, you're buying an asset, not an opportunity.

I would add a third reason: every aspect of retirement planning is subject to risk. But the act of investing in a pension is about attempting to minimise that risk.

In a weird and contradictory way, the little risks you take with investment are about avoiding the big risks you take by not preparing for retirement.

You don't know how long you will live, you don't know how much money you will need, you don't know which investments will perform well. Inaction is more damaging than action. Sometimes we just don't know how things will turn out, and have to make the best plans with that in mind - that's not gambling, that is life.

older_and_no_wiser

I'm so glad I didn't have app or pension platform web access back during the dot com bubble crash in 00(?) and the banking crisis of 08. I would have driven myself crazy and probably started shifting things around needlessly. Thankfully at that point I had no clue how my pensions were invested (yes I know in some ways this was wrong) but ignorance can be an advantage. A little knowledge can be a dangerous thing. 

Marcon

Universidad said:

I would add a third reason: every aspect of retirement planning is subject to risk. But the act of investing in a pension is about attempting to minimise that risk.

In a weird and contradictory way, the little risks you take with investment are about avoiding the big risks you take by not preparing for retirement.

You don't know how long you will live, you don't know how much money you will need, you don't know which investments will perform well. Inaction is more damaging than action. Sometimes we just don't know how things will turn out, and have to make the best plans with that in mind - that's not gambling, that is life.

Got it in one. Unless there's a better alternative (and for a small minority of people there may be), employer contributions for those in employment, + the tax breaks for virtually all contributors, make pensions a rather better bet than what is generally seen as gambling.

Rich1976

I look at mine far too often even though I know I shouldn’t . Maybe if I deleted the apps off my phone I’d be less tempted but I still have online access so probably would still look.

the people I know who don’t do this are those that have no interest in pensions or general money matters except that there’s still a week to go until payday and not much remaining in their bank account.

i have also been guilty of making bad decisions particularly when the markets are on the way down and even though it is normal, it is still unsettling to see the funds go down especially when that sum of money that is ‘lost’ represents a few years contributions and growth.

when the markets are going up it is quite good fun to see the values increasing .

what the answer is I don’t know. I don’t think it’s gambling though but uncertainty of future values plays a big part and what ideally I would like it to achieve.

I suppose I need to accept what will be , will be .

noclaf

I took more control of my work pensions a couple of years back and ended up transferring what was originally 3 distinct employer DC pots into a Fidelity SIPP. I then repeated mistakes I've made previously by tinkering too much with different funds.....there was absolutely no need and I've paid a a lot of unnecessary dealing charges.  In hindsight I should of just put the whole lot into Veve right from the start and left it well alone but the temptation to  add 'niche' funds was too strong....anyway the vast majority is still in Veve so fortunately I've left that well alone and will rebalance further down the line to clean up the rest.

I also check my pensions far too often and as my current work pension has a poor selection of funds that meet my requirements in terms of costs and coverage, ended up using separate regional funds which adds an additional mental burden as I'm always stressing over the allocations e.g: % to allocate to US, UK, EU and so forth. The cheapest active fund is 0.510% but then I ask how can I justify the fee Vs passives 0.16%......the rabbit hole for investments and pensions is a never ending one!

I don't think pensions are a gamble unless you take massive risks e.g: sticking the whole lot on Oil and Mining stocks or other risky single stocks or all in EM funds for example....one could argue leaving your DC pensions in default funds is also a gamble....

sevenhills

CharlieC2210 said:

Roulette etc, where if you play long enough you will lose; a mathematical fact.

If you buy enough shares, by the same logic, you will end up in profit.

michaels

I check mine a couple of times a year and that is probably too often. 

I have no intention of dealing and probably won't even re-balance unless things get majorly out of whack so why bother?

Sarahspangles

At the moment I check my SIPP daily because I only recently opened it. I'm getting to know the mechanics - that the cut off for buying the next chunk of investments is 1000 or 1100, that tax relief is added a month in arrears on 25th, so that if I contribute more around that date and buy something, I won't have money 'sitting' in there as cash for too long, and that I need a bit of cash float for the trading fee and custody charges.

It's a bit like when you get your first job and bank account and learn how to understand a payslip and manage income and outgoings. 

I do look at my SIPP's funds' values after they are updated at 1400 and I've had a play with some of the analysis tools. I've also replicated the portfolio in Trustnet and added a second portfolio there to track how my previous investments would have performed if I'd left them in a workplace pension. Rather than gambling, I'm competing to beat that pension's performance.

I expect I'll lose my current level of interest in monitoring my investments soon, and this will be just another thing I check on 1st of the month. Since the two main funds that I picked say they target capital growth over the medium term there's no point worrying about a gentle rise and fall over the timescale of a few months.

I think my OH is more of a 'gambler' as he buys shares in individual companies and will trade after weeks or a few months. But he's doing this with just a small proportion of his net worth. He's been relatively lucky so far and seen some return 150% of his original stake but there was angst when TUI recently did a rights issue - I think a bit of prior research would have meant this wasn't a complete surprise!

retiringtoosoon

JohnWinder said:

You’d need to choose your own definition of gambling, but at the casino you’re sure to lose on average because that’s how their business runs. You lose money, they provide some fun and make some profit with that money. If you invest sensibly you are very likely to get positive returns over a realistic period. They seem different.

Look at it often enough to guard against malfeasance.

How come? Is Angelina Jolie notorious for hacking people’s pensions?