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

Hudsonbutler

What will happen when the market capitulates in the next few months 🤔

ukdw

Pension - probably a couple of times a week - which is better than the once a day it used to be,  Would ideally like to set up some sort of system that I could trust to notifies only of significant changes (maybe only changes up!).

ISA every couple of days - happy if it's up, and when it goes down sometimes a good prompt to buy a few more units.

When I used to own single company shares, sometimes checked prices more than once a day!   

Agree with the points about investment not being gambling, as with gambling the underlying providers don't tend to gamble themselves and their objective is for you to lose overall. 

With investments like company shares/funds - the underlying providers/company's usually own the shares/funds too and their objective to increase value generally aligns with yours. 

Prism

Hudsonbutler said:

What will happen when the market capitulates in the next few months 🤔

For many that would be great and it would enable a better return over the long term

gambleruk

I check both mine and the wife's once a week and put their values down on a spreadsheet, I have done this for a couple of years now and the reason I do it now is that when I do start withdrawing from the pot then I will not panic when it drops a few grand as I am now use to seeing it happen. I think for people approaching 55 or 57 shortly then it is a really good way to get use to the markets and how they behave without getting to technical.

OldScientist

Since retirement (but bear in mind most of our income comes from a DB pension), investment accounts are checked twice per year just prior to withdrawing from them. Weirdly, cash savings accounts are checked more frequently (monthly) given that we occasionally chase interest rates and play the account merry-go-round (not so much recently since gaining an extra 20-30 basis points on ~3.5% just doesn't seem worth the effort).

Well before retirement (say prior to 2015), DC pots and DB projections were 'checked' (i.e., a quick glance and stuffed in a drawer) annually (there was no online access and I received a letter once per year).

In the run up to retirement (post 2015), accounts were checked monthly as soon as there was extra money to put in them.

If you are a tinkerer (like I am), looking less often is definitely a good idea.

As for the 'gambling' aspect. Contributing to a pension is a 'leap of faith' - you are investing hoping that the global economic system will continue to function and reward the part-owners of that system as it has in the past (albeit, in the UK, accumulating a DC pension during the worst 40 year historical periods would have seen a pot that, in real terms, was similar to what was invested - although this is highly dependent on asset allocation adopted and the contribution history).

Albermarle

Hudsonbutler said:

What will happen when the market capitulates in the next few months 🤔

You will be very rich, as you can apparently predict market movements. So you can sell everything to cash just before the crash, then buy them back when the market is  rock bottom and about to start going up again.

CharlieC2210

dunstonh said:

CharlieC2210 said:

adindas said:

CharlieC2210 said:

Is it wise to stop looking at the value of your pension on a regular basis (several times a year, or more)?

Occasionally I have to log into my pension for something. The value of the pension is right there on the first page I come to. If it’s gone down, say a thousand pounds since I last looked, I get a shock. If it’s gone up I get a buzz.

A while back I was logging in a few times a week for a while, to check my messages (I was sorting something out with the company). Each time I logged in the value had gone down, often by several hundred pounds. In the space of a few weeks it had gone down over a thousand pounds. I reminded myself that these things do go up and down and it’s all about the long run. But it was still scary.

If the best advice is not to check the value on a regular basis, when is it wise to check? Once a year? When they send your annual statement?

What if it went down, and down, and down?

In what way is contributing to a pension like going to the casino. Do we need to accept that we’re gambling? That we might lose?

If it went down, and down, and down, to nothing would there be any compensation scheme to help us out? Or would it be tough luck; we took a punt; and we lost? Or at what point would it be wise to cash in, if it was going down, and down and down?

 

Pension is definitely not gambling. Getting top up for 25% for basic tax payer is definitely common sense, not gambling.

What might be gambling is the type of  investment you choose on your pension fund. Differentiate gambling with taking a calculated risk.

But the top up of 25% is temporary, yeah? You pay most of it back in tax when you start withdrawing, no?

A) if you retire prior to state pension, you can earn £12,570 tax free.    That means you can take over £16k from the pension each year without paying tax.
b) if you draw after the state pension, then most people will have a small amount of personal allowance left over.
c) As a basic rate taxpayer in retirement and working, you are still better of by 6.25% (ignoring personal allowance)
d) the investments within the pension are not subject to CGT, dividend tax or income tax.   And the pension is outside of your estate and not subject to IHT.

So, there is a bit more to it overall. 

Thanks. When you put it like that...   

I heard in another thread that my pension is outside of my estate. I got confused because there was talk of whether or not there was a named beneficiary. To clarify. Is my pension outside of my estate full stop, regardless of whether or not there is a named beneficiary?
Also, is my life insurance outside of my estate?

Who decides who these things go to, when I die?

CharlieC2210

retiringtoosoon said:

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?

I had to Google that one

Albermarle

CharlieC2210 said:

dunstonh said:

CharlieC2210 said:

adindas said:

CharlieC2210 said:

Is it wise to stop looking at the value of your pension on a regular basis (several times a year, or more)?

Occasionally I have to log into my pension for something. The value of the pension is right there on the first page I come to. If it’s gone down, say a thousand pounds since I last looked, I get a shock. If it’s gone up I get a buzz.

A while back I was logging in a few times a week for a while, to check my messages (I was sorting something out with the company). Each time I logged in the value had gone down, often by several hundred pounds. In the space of a few weeks it had gone down over a thousand pounds. I reminded myself that these things do go up and down and it’s all about the long run. But it was still scary.

If the best advice is not to check the value on a regular basis, when is it wise to check? Once a year? When they send your annual statement?

What if it went down, and down, and down?

In what way is contributing to a pension like going to the casino. Do we need to accept that we’re gambling? That we might lose?

If it went down, and down, and down, to nothing would there be any compensation scheme to help us out? Or would it be tough luck; we took a punt; and we lost? Or at what point would it be wise to cash in, if it was going down, and down and down?

 

Pension is definitely not gambling. Getting top up for 25% for basic tax payer is definitely common sense, not gambling.

What might be gambling is the type of  investment you choose on your pension fund. Differentiate gambling with taking a calculated risk.

But the top up of 25% is temporary, yeah? You pay most of it back in tax when you start withdrawing, no?

A) if you retire prior to state pension, you can earn £12,570 tax free.    That means you can take over £16k from the pension each year without paying tax.
b) if you draw after the state pension, then most people will have a small amount of personal allowance left over.
c) As a basic rate taxpayer in retirement and working, you are still better of by 6.25% (ignoring personal allowance)
d) the investments within the pension are not subject to CGT, dividend tax or income tax.   And the pension is outside of your estate and not subject to IHT.

So, there is a bit more to it overall. 

Thanks. When you put it like that...   

I heard in another thread that my pension is outside of my estate. I got confused because there was talk of whether or not there was a named beneficiary. To clarify. Is my pension outside of my estate full stop, regardless of whether or not there is a named beneficiary?
Also, is my life insurance outside of my estate?

Who decides who these things go to, when I die?

Your pension is held in trust, so it does not legally belong directly to you, that is why it is not included in your estate when you die. So it should not be mentioned in your will,and it will not be included in any inheritance tax calculations ( unless the law changes at some point ).
You should have filled in an Expression of Wish form, naming your chosen beneficiary(s).
Normally the Trustees will follow your instructions, although they have the final decision.
If you do not name a beneficiary, or for example they have died, or you have got divorced but you never changed the Expression Of wish form, then the Trustees will look into family circumstances and ask questions before deciding what to do.

SouthCoastBoy

Putting money into a dc pension is definitely a risk as nobody can predict the future, defined benefit is a lot less riskier, especially if linked to cpi or rpi. Over the last 20 or so years as companies have moved to dc pensions the risk has been transferred from the employer to the worker. The long term result of that and the impact to retirement funds has yet to be seen.

I know a lot of people who work for the civil service and appear clueless about pensions and are amazed I have a pot of money which I need to manage, the vast of majority of the people I speak to would have no idea where to start. Maybe the dc pension is a ticking time bomb which won't come to full fruition for another 10 to 20 years, by then there could be a massive gap between db and dc beneficiaries lifestyle.