Capita workplace pension - huge loss

FatFred66

loveprada said:

QrizB said:

loveprada said:

Am I supposed to just take the hit? Is there any point in raising a complaint?

Not wishing to sound unsympathetic, but yes I think you need to take the hit.

What specifically would you complain about?

You were in a lifestyle scheme that was designed to let you buy an annuity at your declared pension age. Capita managed your funds to achieve this end and your funds are still invested in a way that lets you but an annuity.

Exactly how have they failed to follow your instructions?

Back on page 1 of this thread you wrote:

I recall a few years ago I received some paperwork asking me what I want to do and how I want to receive the pension. I called them and discussed this and told them I wanted to remain invested.

Can you prove that this happened, and that Capita were happy to take your instructions verbally over the phone? Or dod Capita send out some paperwork for you to complete?

There is a clause in the paperwork saying "If you no longer intend to draw your benefits at your currently selected retirement date please contact the Capita administration team on... (phone number)". So what was the point of it if they dont follow through? They haven't sent me a statement in 3 years or even bothered to notify me what they're doing with my money but it has been constantly changing from one fund to another from what they've now sent me. They're just inflicting whatever they've wanted to do on me. No I doubt I can actually prove this happened. It's their word against mine.

I had the same with Royal London. I contacted them before the 'retirement date' I'd nodded my head to when I was in my twenties. It came to the date and I wasn't ready to retire, so I called them and they told me my pension would carry on invested in the same funds even if I did nothing with it after the agreed retirement date.

They actually seem to have shifted it into something else entirely, which I suspect was based on their Short Term Money Market Fund, and it held its value much better than my expensively-IFA-selected funds last year. Now transferred out and doing much better in a SIPP with much more transparency.

loveprada

FatFred66 said:

loveprada said:

QrizB said:

loveprada said:

Am I supposed to just take the hit? Is there any point in raising a complaint?

Not wishing to sound unsympathetic, but yes I think you need to take the hit.

What specifically would you complain about?

You were in a lifestyle scheme that was designed to let you buy an annuity at your declared pension age. Capita managed your funds to achieve this end and your funds are still invested in a way that lets you but an annuity.

Exactly how have they failed to follow your instructions?

Back on page 1 of this thread you wrote:

I recall a few years ago I received some paperwork asking me what I want to do and how I want to receive the pension. I called them and discussed this and told them I wanted to remain invested.

Can you prove that this happened, and that Capita were happy to take your instructions verbally over the phone? Or dod Capita send out some paperwork for you to complete?

There is a clause in the paperwork saying "If you no longer intend to draw your benefits at your currently selected retirement date please contact the Capita administration team on... (phone number)". So what was the point of it if they dont follow through? They haven't sent me a statement in 3 years or even bothered to notify me what they're doing with my money but it has been constantly changing from one fund to another from what they've now sent me. They're just inflicting whatever they've wanted to do on me. No I doubt I can actually prove this happened. It's their word against mine.

I had the same with Royal London. I contacted them before the 'retirement date' I'd nodded my head to when I was in my twenties. It came to the date and I wasn't ready to retire, so I called them and they told me my pension would carry on invested in the same funds even if I did nothing with it after the agreed retirement date.

They actually seem to have shifted it into something else entirely, which I suspect was based on their Short Term Money Market Fund, and it held its value much better than my expensively-IFA-selected funds last year. Now transferred out and doing much better in a SIPP with much more transparency.

How did you go about deciding what to buy for your SIPP?

loveprada

Bostonerimus1 said:

There's fault to shared here. The pension company doesn't really care what happens to the OP's money, they just apply some accepted algorithm, take their fees and shrug. If the OP asked for another investment strategy and were ignored then the pension company has some questions to ask, but so does the OP if they were silent when they didn't receive any statements for 3 years.

Sounds right but in January 2022 the balance was £21k and it swiftly fell to around £13k which is the current amount. It has fallen in every transaction they have made since January 22, this happened in less than a year. I was hoping it might go up slightly but it hasn't.

FatFred66

Personally I think that the whole pension industry has misled us. We've all assumed that our investments 'carefully selected' by 'professionals' would be looked after in the long term and moved around as appropriate.

In reality, unless (generally) we've taken an active role beyond our reasonably-expected capabilities, our hard-earned money has been left to languish in bad funds and/or sold on to companies we've never heard of, to be left to languish in bad funds, subject to the whims of some !!!!!! we'd never give the time of day to.

Nobody ever told me I need to keep a keen eye on what's happening and learn about investments. I assumed that my knowledgeable IFAs and the knowledgeable people running my 'managed' pension funds would be doing something to maximise my pension.

If somebody had mentioned that these people/companies had no actual interest in maximising my retirement pot and were more interested in their own comfortable outcomes I might have taken more interest before I hit my fifties.

FatFred66

loveprada said:

FatFred66 said:

loveprada said:

QrizB said:

loveprada said:

Am I supposed to just take the hit? Is there any point in raising a complaint?

Not wishing to sound unsympathetic, but yes I think you need to take the hit.

What specifically would you complain about?

You were in a lifestyle scheme that was designed to let you buy an annuity at your declared pension age. Capita managed your funds to achieve this end and your funds are still invested in a way that lets you but an annuity.

Exactly how have they failed to follow your instructions?

Back on page 1 of this thread you wrote:

I recall a few years ago I received some paperwork asking me what I want to do and how I want to receive the pension. I called them and discussed this and told them I wanted to remain invested.

Can you prove that this happened, and that Capita were happy to take your instructions verbally over the phone? Or dod Capita send out some paperwork for you to complete?

There is a clause in the paperwork saying "If you no longer intend to draw your benefits at your currently selected retirement date please contact the Capita administration team on... (phone number)". So what was the point of it if they dont follow through? They haven't sent me a statement in 3 years or even bothered to notify me what they're doing with my money but it has been constantly changing from one fund to another from what they've now sent me. They're just inflicting whatever they've wanted to do on me. No I doubt I can actually prove this happened. It's their word against mine.

I had the same with Royal London. I contacted them before the 'retirement date' I'd nodded my head to when I was in my twenties. It came to the date and I wasn't ready to retire, so I called them and they told me my pension would carry on invested in the same funds even if I did nothing with it after the agreed retirement date.

They actually seem to have shifted it into something else entirely, which I suspect was based on their Short Term Money Market Fund, and it held its value much better than my expensively-IFA-selected funds last year. Now transferred out and doing much better in a SIPP with much more transparency.

How did you go about deciding what to buy for your SIPP?

I'm not qualified in any way to give advice on investments.

I also don't believe that the advice that most IFAs have been giving over the last few years is correct. They've completely failed to take account of the historically-low interest rates over the last 10+ years and consider what might happen if interest rates went up.

I've also failed to do that, but I'm not a FA and I've got the benefit of hindsight.  It's been obvious for years that investments in bonds were like sticking money under the bed though. The last year has shown it would be better off under the bed.

New direct investments in bonds/gilts are a different matter though, particularly if you can hold them until maturity.

As for me I've got money in around 8 global funds, some index funds and some with different investment strategies. Between them I have less of a weighting towards US/Microsoft/Facebook/Google/Tesla/etc. than the average global fund. I'm also absolutely overweight on UK funds - FTSE 100 tracker and FTSE All-Share tracker. They're way undervalued compared to US funds. At the moment I've got 30+%-ish in Short Term Money Markets Funds - I think I've missed the boat for changing them to Gilts (I wasn't able to), but we'll see. 

And despite my hate of funds which rely too much on headline US tech stocks I've still got a substantial investment in 'Royal London Global Equity Select M Acc' GB00BF93W972, which has performed very consistently over the last 5 years.

loveprada

FatFred66 said:

loveprada said:

FatFred66 said:

loveprada said:

QrizB said:

loveprada said:

Am I supposed to just take the hit? Is there any point in raising a complaint?

Not wishing to sound unsympathetic, but yes I think you need to take the hit.

What specifically would you complain about?

You were in a lifestyle scheme that was designed to let you buy an annuity at your declared pension age. Capita managed your funds to achieve this end and your funds are still invested in a way that lets you but an annuity.

Exactly how have they failed to follow your instructions?

Back on page 1 of this thread you wrote:

I recall a few years ago I received some paperwork asking me what I want to do and how I want to receive the pension. I called them and discussed this and told them I wanted to remain invested.

Can you prove that this happened, and that Capita were happy to take your instructions verbally over the phone? Or dod Capita send out some paperwork for you to complete?

There is a clause in the paperwork saying "If you no longer intend to draw your benefits at your currently selected retirement date please contact the Capita administration team on... (phone number)". So what was the point of it if they dont follow through? They haven't sent me a statement in 3 years or even bothered to notify me what they're doing with my money but it has been constantly changing from one fund to another from what they've now sent me. They're just inflicting whatever they've wanted to do on me. No I doubt I can actually prove this happened. It's their word against mine.

I had the same with Royal London. I contacted them before the 'retirement date' I'd nodded my head to when I was in my twenties. It came to the date and I wasn't ready to retire, so I called them and they told me my pension would carry on invested in the same funds even if I did nothing with it after the agreed retirement date.

They actually seem to have shifted it into something else entirely, which I suspect was based on their Short Term Money Market Fund, and it held its value much better than my expensively-IFA-selected funds last year. Now transferred out and doing much better in a SIPP with much more transparency.

How did you go about deciding what to buy for your SIPP?

I'm not qualified in any way to give advice on investments.

I also don't believe that the advice that most IFAs have been giving over the last few years is correct. They've completely failed to take account of the historically-low interest rates over the last 10+ years and consider what might happen if interest rates went up.

I've also failed to do that, but I'm not a FA and I've got the benefit of hindsight.  It's been obvious for years that investments in bonds were like sticking money under the bed though. The last year has shown it would be better off under the bed.

New direct investments in bonds/gilts are a different matter though, particularly if you can hold them until maturity.

As for me I've got money in around 8 global funds, some index funds and some with different investment strategies. Between them I have less of a weighting towards US/Microsoft/Facebook/Google/Tesla/etc. than the average global fund. I'm also absolutely overweight on UK funds - FTSE 100 tracker and FTSE All-Share tracker. They're way undervalued compared to US funds. At the moment I've got 30+%-ish in Short Term Money Markets Funds - I think I've missed the boat for changing them to Gilts (I wasn't able to), but we'll see. 

And despite my hate of funds which rely too much on headline US tech stocks I've still got a substantial investment in 'Royal London Global Equity Select M Acc' GB00BF93W972, which has performed very consistently over the last 5 years.

You sound very savvy, how do you do your research? 

loveprada

FatFred66 said:

Personally I think that the whole pension industry has misled us. We've all assumed that our investments 'carefully selected' by 'professionals' would be looked after in the long term and moved around as appropriate.

In reality, unless (generally) we've taken an active role beyond our reasonably-expected capabilities, our hard-earned money has been left to languish in bad funds and/or sold on to companies we've never heard of, to be left to languish in bad funds, subject to the whims of some !!!!!! we'd never give the time of day to.

Nobody ever told me I need to keep a keen eye on what's happening and learn about investments. I assumed that my knowledgeable IFAs and the knowledgeable people running my 'managed' pension funds would be doing something to maximise my pension.

If somebody had mentioned that these people/companies had no actual interest in maximising my retirement pot and were more interested in their own comfortable outcomes I might have taken more interest before I hit my fifties.

Yes, I agree. Even worse is that the government have deliberately pushed us into this direction but its completely hit and miss.

Springfield1970

I like the idea of someone being financially motivated to get more profit out of my pension, and so I pay an adviser .75% of the yearly value of my pension to make the fund decisions for me, through an Aegon platform charging about .34%.  Each fund has its own charges too.  At the moment he is only making a few hundred a year from me, barely worth it, I can see how later on down the line it would be more motivating, so all I can do is trust that he is informed and making good decisions.

Time will only tell. The pension has just been stagnating for a couple of years now, but I put in money that would be higher rate taxed anyway so it's an immediate 25% kerching.

Ive only been in a position to make this no brainer decision in the last 7 years, after a lifetime of being highly suspicious and reluctant to deal with the pension problem.
Good luck OP, I hope you get the best outcome you can!

Bostonerimus1

FatFred66 said:

loveprada said:

FatFred66 said:

loveprada said:

QrizB said:

loveprada said:

Am I supposed to just take the hit? Is there any point in raising a complaint?

Not wishing to sound unsympathetic, but yes I think you need to take the hit.

What specifically would you complain about?

You were in a lifestyle scheme that was designed to let you buy an annuity at your declared pension age. Capita managed your funds to achieve this end and your funds are still invested in a way that lets you but an annuity.

Exactly how have they failed to follow your instructions?

Back on page 1 of this thread you wrote:

I recall a few years ago I received some paperwork asking me what I want to do and how I want to receive the pension. I called them and discussed this and told them I wanted to remain invested.

Can you prove that this happened, and that Capita were happy to take your instructions verbally over the phone? Or dod Capita send out some paperwork for you to complete?

There is a clause in the paperwork saying "If you no longer intend to draw your benefits at your currently selected retirement date please contact the Capita administration team on... (phone number)". So what was the point of it if they dont follow through? They haven't sent me a statement in 3 years or even bothered to notify me what they're doing with my money but it has been constantly changing from one fund to another from what they've now sent me. They're just inflicting whatever they've wanted to do on me. No I doubt I can actually prove this happened. It's their word against mine.

I had the same with Royal London. I contacted them before the 'retirement date' I'd nodded my head to when I was in my twenties. It came to the date and I wasn't ready to retire, so I called them and they told me my pension would carry on invested in the same funds even if I did nothing with it after the agreed retirement date.

They actually seem to have shifted it into something else entirely, which I suspect was based on their Short Term Money Market Fund, and it held its value much better than my expensively-IFA-selected funds last year. Now transferred out and doing much better in a SIPP with much more transparency.

How did you go about deciding what to buy for your SIPP?

I'm not qualified in any way to give advice on investments.

I also don't believe that the advice that most IFAs have been giving over the last few years is correct. They've completely failed to take account of the historically-low interest rates over the last 10+ years and consider what might happen if interest rates went up.

I've also failed to do that, but I'm not a FA and I've got the benefit of hindsight.  It's been obvious for years that investments in bonds were like sticking money under the bed though. The last year has shown it would be better off under the bed.

New direct investments in bonds/gilts are a different matter though, particularly if you can hold them until maturity.

As for me I've got money in around 8 global funds, some index funds and some with different investment strategies. Between them I have less of a weighting towards US/Microsoft/Facebook/Google/Tesla/etc. than the average global fund. I'm also absolutely overweight on UK funds - FTSE 100 tracker and FTSE All-Share tracker. They're way undervalued compared to US funds. At the moment I've got 30+%-ish in Short Term Money Markets Funds - I think I've missed the boat for changing them to Gilts (I wasn't able to), but we'll see. 

And despite my hate of funds which rely too much on headline US tech stocks I've still got a substantial investment in 'Royal London Global Equity Select M Acc' GB00BF93W972, which has performed very consistently over the last 5 years.

Your sentiments are why many people DIY. Sometimes I feel a bit sorry for the investment management firms and their clients who were approaching retirement and in target retirement date funds that automatically shifted to bonds as they did so into the teeth of a massive bond market decline, but then I think again and just gasp at the stupidity and how people can be so trusting and gullible with their money. It would be interesting to know the mix of bonds as short term ones would have been more stable than long durations. I don't think it's a good idea to ever be overweighted in an asset (be it bonds or equities or cash) unless you can afford to take big losses.

I retired in 2014 and I though that interest rates really couldn't fall much lower and so I converted most of my bond allocation into a DB pension, my employer allowed me to buy in. I have retirement income covered by that DB pension and rental income from a flat I own so I can take the risk of having a portfolio of 85% equities and 15% bonds. I just use a cheap US equity index tracker and a Global (ex US) equity tracker for my equity investments. I recently moved some cash from my bank account into a Money Market Fund where it can earn 5% right now. Since I retired I've averaged 8% annual gain. I was down 18% last year, but I'm up 18% this year. I have done nothing to manage my investments because I don't need to as their value is irrelevant to my retirement income.

OldScientist

Looking to the future, since it would appear you have been invested in a lifestyle fund that assumed you would be taking an annuity at retirement, you realistically have two choices:

1) Take an annuity. You have been quoted about £500pa, but it is important to know exactly what type of annuity it is:
a) single life or joint life. Outside of any guarantee period, the former will only pay out until your death, while the latter will continue to pay a fraction (often 50%, but options up to 100% are available) of the income to a named beneficiary (usually a spouse) until their death.
b) Guarantee period. As explained earlier in the thread, this means that the income will be paid for N years (you've been quoted for 5 years). Guarantee periods up to 20 or 30 years are available, but will reduce the income.
c) Inflation protection, the choices are level, fixed escalation, or RPI (index linked/inflation protected). This is a key consideration, since
i) a level income will be £500 for all time and will, in the presence of inflation, reduce in spending power with time (e.g. with 4% inflation, after 10 years the income would only be worth about £340 in today's money).
ii) A fixed escalation (typically 3%) will increase the amount of income by that amount each year. For example, with a 3% escalation, the income would go up from £500 to £515 to £530.45, etc.
iii) An RPI annuity will increase the income by the inflation rate (currently RPI, but CPIH after 2030), i.e. assuming RPI stays at 9% for the next year, then the amount in the 2nd year would be £545. More importantly, the spending power of the income would remain fixed.

2) Move to drawdown (this also applies to any lump sum if the annuity is taken). The historical UK inflation adjusted withdrawal rate for a moderately adventurous portfolio (e.g., 60% stocks, 40% cash/bonds) for a 30 year planning horizon was somewhere between 3.0% to 3.5%. This means your portfolio would provide an inflation adjusted income of about £490 per year (taking the upper value of 3.5%), while the lump sum would provide about £100 per year.