Are there rules for providers to keep pension values honest?

techtive

I am experiencing a disturbing and persistent drop in my invested pension value which is leading to some considerable anxiety. I need to find a way to understand how I can address this and cannot help holding some suspicion towards my pension provider. I believe they are going through some period of business restructuring.

My pension is sitting in the medium volatility level #4 and has declined by 10% since March this year after I accessed it to take the 25% tax free lump sum. I genuinely fear this will drain down significantly more.

I am unsure if this is a comparative poor performer in the pension market, or if the company is performing below agreeable levels. I wish to know how to determine where this money is best placed. I did approach some financial advisers but was shocked by their charge plans that would take a huge amount from my hard earned pension savings.

This all feels so wrong, so would be grateful to understand some logical steps I could follow that do not cost me a high commission on my pension, or require me to personally play with the financial markets. 

AlanP_2

By default you are playing with financial markets if you don't use an adviser to do it for you 

The extent can vary, you are just dipping your toe in the DIY waters by "choosing" a pension provider and then from the investment range they offer.

Like many people this may not have been an active choice but as a result of employer scheme and their default investments. Technically still your decision though at the end of the day.


First thing, who is the provider and what investments is it in?

Based on your drop in value since March I would guess that you are in a fund that has a significant bond element.

Traditionally these are less volatile than equities but have suffered a really bad run recently. In simple terms as interest rates rise bond values fall.

If my guess is correct a similar investment with a different company would have performed the same. The pension provider does not perform the investments do.

dunstonh

I am experiencing a disturbing and persistent drop in my invested pension value which is leading to some considerable anxiety.

Persistent needs context.   2022 was a negative year with October 2022 being the low point but it improved over November and December.   2023 has been wavy line but not going anywhere for most people.    If you are heavier in gilts, then they have continued to go down but equities have mostly offset them.  

I need to find a way to understand how I can address this and cannot help holding some suspicion towards my pension provider. I believe they are going through some period of business restructuring.

Your pension provider is an administrator for the pension.  Not the fund manager.

Firstly you need to understand your investments as that is where the performance is.   And its the one thing you haven't mentioned.

My pension is sitting in the medium volatility level #4 and has declined by 10% since March this year after I accessed it to take the 25% tax free lump sum. I genuinely fear this will drain down significantly more.

Taking money out after a negative period is not helpful unless you are drawing from the cash element of your pension because you forward planned the withdrawal.

Medium 4 needs context.

I am unsure if this is a comparative poor performer in the pension market, or if the company is performing below agreeable levels.

As said above, pension companies do not perform.  The investments do that.

 I wish to know how to determine where this money is best placed. I did approach some financial advisers but was shocked by their charge plans that would take a huge amount from my hard earned pension savings.

Best to avoid FAs. They tend to be expensive and you are limited to their in-house offerings which tend not to be that good.   If you need advice, then you should use an IFA.   However, that will still come at cost but often it can be cheaper than what you already have.  Plus, if it can help avoid you making a mistake that could be far more costly.   e.g. if you are on a plan that is costing 1% p.a. and the IFA recommends a plan that costs you 0.35% p.a.   A step backwards in the initial fee but then an ongoing saving thereafter.

This all feels so wrong, so would be grateful to understand some logical steps I could follow that do not cost me a high commission on my pension, or require me to personally play with the financial markets. 

• Nothing you have said indicates any wrongdoing.
• Commission hasn't existed since the end of 2012.  However, if your plan was set up before then, it is possible that a commission is being paid out of your charges.
• You don't sound anywhere near able to play with the financial markets.  And if you actually had the knowledge, you wouldn't attempt to do that either as that would be a bad idea.

Your issue is down to a lack of understanding.   Thats all.     You are concerned after a negative year but negative years happen.  2020 didn't finish negative but it had a much bigger fall in Spring.   Other negative periods happened in 2018, 2015/16, 2008, 2000 to 2002 (twice as long as this negative period and much deeper)

What did you do in those other negative years?  What is different about this negative period to the previous ones?

and finally, what are your investments?   That is what you are concerned about but you haven't actually said what they are.

Marcon

There are lots of posts on this forum expressing concerns about drops in fund values. If you have a look at some of those (the thread titles spring off the page fairly readily), it should give you reassurance that your pension provider's 'restructuring' has nothing to do with the performance of these funds, which are in any case ring-fenced.

Doctor_Who

Some very sensible comments and suggestions above. You might also find these links help you understand more about your pension, and especially that it's the investments your pension holds that vary in value.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pensions-basics

https://www.moneysavingexpert.com/savings/discount-pensions/

Pat38493

techtive said:

I am experiencing a disturbing and persistent drop in my invested pension value which is leading to some considerable anxiety. I need to find a way to understand how I can address this and cannot help holding some suspicion towards my pension provider. I believe they are going through some period of business restructuring.

My pension is sitting in the medium volatility level #4 and has declined by 10% since March this year after I accessed it to take the 25% tax free lump sum. I genuinely fear this will drain down significantly more.

I am unsure if this is a comparative poor performer in the pension market, or if the company is performing below agreeable levels. I wish to know how to determine where this money is best placed. I did approach some financial advisers but was shocked by their charge plans that would take a huge amount from my hard earned pension savings.

This all feels so wrong, so would be grateful to understand some logical steps I could follow that do not cost me a high commission on my pension, or require me to personally play with the financial markets. 

Can you tell us hwat are the actual investments that your pension is in and who is the provider?  Medium volatility level 4 doesn't narrow it down enough.

As others have posted, for the most part, it's not the pension provider that determines your investment returns but the investments that the fund is put into, inside the pension wrapper, which is theoretically your choice not theirs.

Albermarle

techtive said:

I am experiencing a disturbing and persistent drop in my invested pension value which is leading to some considerable anxiety. I need to find a way to understand how I can address this and cannot help holding some suspicion towards my pension provider. I believe they are going through some period of business restructuring. It will be nothing to do with that, so best to drop your suspicions.

My pension is sitting in the medium volatility level #4 and has declined by 10% since March this year after I accessed it to take the 25% tax free lump sum. I genuinely fear this will drain down significantly more. What info are you basing this fear on?

I am unsure if this is a comparative poor performer in the pension market, or if the company is performing below agreeable levels. I wish to know how to determine where this money is best placed. I did approach some financial advisers but was shocked by their charge plans that would take a huge amount from my hard earned pension savings.

This all feels so wrong, so would be grateful to understand some logical steps I could follow that do not cost me a high commission on my pension, or require me to personally play with the financial markets. Nearly all pensions are invested in the financial markets, including the one you have.

See in bold above . As far as I can see you have two options:
1) Pay an IFA to manage your pension for you, but be clear this does not guarantee any specific result.
2) Spend a lot of time researching about investments and then reassess your investment choices,  and manage the pension/investments more actively in future.