Poor pension fund performance

Malthusian

briktopp said:

2018 may have been good year but one of my pots was at its smallest anyway so by my maths i was least likely to notice growth there anyway...I should check the other bigger pot that ive had for 18 years to see if 2018 was better

A more useful metric would be how much the bigger pot is worth now compared to the amount you put in over the 18 years.
You have been through a period of near-zero growth over 5 years with the bigger pot as well - 2007 to 2012.

dunstonh

You have been through a period of near-zero growth over 5 years with the bigger pot as well - 2007 to 2012.

And equities ended up lower after 10 years between 1st Jan 2000 and 31 dec 2009.

MallyGirl

briktopp said:

I mentioned 5 years of zero growth..to calculate this I roughly looked at how much my employer and I have contributed in total and compared it to the current value and i might as well have kept it under the bed

If you had put it under the bed it would be worth a lot less due to the tax, and possibly NI, breaks you get for putting it in a pension that would not have happened by taking it all as income.

Pat38493

MallyGirl said:

briktopp said:

I mentioned 5 years of zero growth..to calculate this I roughly looked at how much my employer and I have contributed in total and compared it to the current value and i might as well have kept it under the bed

If you had put it under the bed it would be worth a lot less due to the tax, and possibly NI, breaks you get for putting it in a pension that would not have happened by taking it all as income.

Also you are owning a particular number of units of the funds which could grow spectacularly in the next 5 years - indeed if they had 5 bad years, statistically I would guess they are more likely to have some good years ahead although one can never be sure.  Cash under the matress will never grow, only shrink with inflation.

Cus

dunstonh said:
Too short again.  Those contributions made in that period will go on to be the ones that make the most.  i.e. units bought during downturns make more than units bought in growth periods.  

Don't want to pick on you specifically but this idea about how it's a good thing if prices go down during the accumulation phase doesn't sit right with me.. mathematically..  
Surely the chance of a price going to an even higher point is more likely from a nearly higher price than from a lower price?

Pat38493

Cus said:

dunstonh said:
Too short again.  Those contributions made in that period will go on to be the ones that make the most.  i.e. units bought during downturns make more than units bought in growth periods.  

Don't want to pick on you specifically but this idea about how it's a good thing if prices go down during the accumulation phase doesn't sit right with me.. mathematically..  
Surely the chance of a price going to an even higher point is more likely from a nearly higher price than from a lower price?

It assumes you are making regular contributions as you are buying fund units at a lower unit price when markets are down.  

Bostonerimus1

briktopp said:

just wanted to say thankyou to everyone for contributing to this thread..it has contributed to my learning for sure.

Im comfortable with the idea of factoring in inflation when analysing performance.

My pension providers have both pointed towards my options of changing funds but obviously i dont want to make blind decisions hence part the reason i started this thread. I dont want to reply on a big rebound to fund a career change

I mentioned 5 years of zero growth..to calculate this I roughly looked at how much my employer and I have contributed in total and compared it to the current value and i might as well have kept it under the bed

2018 may have been good year but one of my pots was at its smallest anyway so by my maths i was least likely to notice growth there anyway...I should check the other bigger pot that ive had for 18 years to see if 2018 was better

If you tell us what funds you have invested in for the past 5 years it will help us to understand why your performance is poor. Over the past 5 years if you'd just invested in a portfolio of 60% stocks and 40% bonds you should have seen some positive growth, but you should also figure out how much you are paying in fees. Part of the reason I DIY my investments is to minimise those fees.

briktopp

Ok yes I understand why more detail is.necessary..one fund is legal and.general PMC  workplace  target date 2035-2040 fund 3...it's is invested in mixed assets

Opened in Oct 2018 it actually shows 2.38% growth as of today(so I lied about zero growth but hey still pants right)

But here's the odd thing when I research the fund online it shows cumulative 5 year growth of 13.8% growth???? I thought maybe charges account for massive difference but at 0.15% I don't think so

I've messaged legal and general for an explanation 

dunstonh

But here's the odd thing when I research the fund online it shows cumulative 5 year growth of 13.8% growth???? I thought maybe charges account for massive difference but at 0.15% I don't think so

Cumulative growth is based on your making a single contribution at that start date and the value of it at the end date.   It is not going to be the same figure for regular contributions.    For a lot of that period, the regular contributions would have bought units higher than the 2018 price and higher than than the 2023 price.

Plus, days difference matter.    For example, 3 days ago, values were lower than they are today.   We are lower than they were a month ago.   So, unless you compare like for like on exactly the same days, you are going to get differences.

(so I lied about zero growth but hey still pants right)

Why is it pants?  Its a negative period.  its what happens in negative periods.   its not actually pants unless you are drawing the money out now.  It is actually a good thing if you are paying in monthly

briktopp

Blimey it's confusing