How can I stop my pension company losing my money?

Nelson1100

tigerspill said:

Nelson1100 said:

Its a legal and general workplace pension. Looking at the paperwork I have 2 funds L&G PMC Fixed interest 3 (which is -14.76%) and L&G PMC Cash (which is at 6.41%)

But my general question has been answered in as much as it looks like there's nothing I can do to stop them losing my money other than just cashing out. 

They haven't lost your money - you have.  You chose the investments.  They may have been initially been chosen by them or your company, but you must have accepted these.  Surely you get to change these investments if you wish.

I don't ever remember L&G asking me what I wanted to be invested in. To be honest when my company first started paying in I didn't realise there was a choice, I just thought L&G took the money and they decided what to do with it, its only recently when I thought about retiring that I started to pay any attention to it.

But you are correct I can change the investments but because I don't understand the jargon I don't know what to change them to.  As other posters suggest I will try to find an IFA that will take me on but of all the ones I've contacted so far they were very polite and reasonably helpful but they wouldn't take me on because I didn't have enough overall.

bjorn_toby_wilde

Pat 38493 has it right. I have an issue with the way the industry frames “risk”. They use the word risk when they should use volatility.

If you select funds that are low risk you may well in the past have removed much of the volatility, but at the expense of growth.

If you were taking all of your pension for an annuity at retirement I could see the point of lifestyling but in reality most may well be invested for another 20-30 years.

Bostonerimus1

Nelson1100 said:

tigerspill said:

Nelson1100 said:

Its a legal and general workplace pension. Looking at the paperwork I have 2 funds L&G PMC Fixed interest 3 (which is -14.76%) and L&G PMC Cash (which is at 6.41%)

But my general question has been answered in as much as it looks like there's nothing I can do to stop them losing my money other than just cashing out. 

They haven't lost your money - you have.  You chose the investments.  They may have been initially been chosen by them or your company, but you must have accepted these.  Surely you get to change these investments if you wish.

I don't ever remember L&G asking me what I wanted to be invested in. To be honest when my company first started paying in I didn't realise there was a choice, I just thought L&G took the money and they decided what to do with it, its only recently when I thought about retiring that I started to pay any attention to it.

But you are correct I can change the investments but because I don't understand the jargon I don't know what to change them to.  As other posters suggest I will try to find an IFA that will take me on but of all the ones I've contacted so far they were very polite and reasonably helpful but they wouldn't take me on because I didn't have enough overall.

Don't get hung up on 90% of the jargon. Look for funds under the category of "multi-asset". These will contain a mix of bonds and company shares. You need a bit of education to choose one so start here. 

https://www.moneysavingexpert.com/savings/investment-beginners/
https://www.bogleheads.org/wiki/Investing_from_the_UK

If it's all too much talk to an IFA. We can offer words, but only you can take the action necessary to solve your problem.

tigerspill

Nelson1100 said:

tigerspill said:

Nelson1100 said:

Its a legal and general workplace pension. Looking at the paperwork I have 2 funds L&G PMC Fixed interest 3 (which is -14.76%) and L&G PMC Cash (which is at 6.41%)

But my general question has been answered in as much as it looks like there's nothing I can do to stop them losing my money other than just cashing out. 

They haven't lost your money - you have.  You chose the investments.  They may have been initially been chosen by them or your company, but you must have accepted these.  Surely you get to change these investments if you wish.

I don't ever remember L&G asking me what I wanted to be invested in. To be honest when my company first started paying in I didn't realise there was a choice, I just thought L&G took the money and they decided what to do with it, its only recently when I thought about retiring that I started to pay any attention to it.

But you are correct I can change the investments but because I don't understand the jargon I don't know what to change them to.  As other posters suggest I will try to find an IFA that will take me on but of all the ones I've contacted so far they were very polite and reasonably helpful but they wouldn't take me on because I didn't have enough overall.

When you were enrolled, the documentation would have specified the default investments that you would have been buying into.  

I appreciate that it is not straightforward to choose funds.  There are two main ways to go about this - 1) Learn the area and make your own choices, or 2) Pay an IFA to help you (remember, the risk will still sit with you - not the IFA).  It's a bit like any profession - if you need some plumbing or electrical work done - you can learn and diy it or pay someone else.  Any IFA I have been to has given an initial cinsultation regardless of sums involved.  An IFA is for more than choosing investments.

Since the pension changes a number of years ago, many have become investors - big investors if pensions have considerable money.  

Nelson1100

I've had a look at the "Multi Asset" funds on the L&G portal but it all seems a bit too complicated for me, what I've done in the short term is moved everything out of the L&G PMC Fixed interest 3 which is down -14.76% and put it all in the other one which is L&G PMC Cash which is up at 6.41%. Hopefully that'll stop the rot until I can get some advice.

Hoenir

bjorn_toby_wilde said:

If you select funds that are low risk you may well in the past have removed much of the volatility, but at the expense of growth.

Growth is simply a number on a screen . What the market giveth it can rapidly take away.  Markets have been benign for so long that there's very obvious complacency existing today. 

Mutton_Geoff

I'd also be very careful the numbers you are reading relate to your own position and not a standard fact sheet figure for the 12 months up to when the fact sheet was published.

Bostonerimus1

Nelson1100 said:

I've had a look at the "Multi Asset" funds on the L&G portal but it all seems a bit too complicated for me, what I've done in the short term is moved everything out of the L&G PMC Fixed interest 3 which is down -14.76% and put it all in the other one which is L&G PMC Cash which is up at 6.41%. Hopefully that'll stop the rot until I can get some advice.

Well you've managed to crystalize your losses. Right now I think you need to talk to an IFA.

DoublePolaroid

elsien said:

Why is everything on here always a scam?

Damien has a stab at answering why people who are not as savvy about personal finance as the folk who frequent these forums might worry about pensions being a scam. Being somebody who is not as knowledgable as most on here I have sympathy with this fear, whilst nevertheless broadly disagreeing with the sentiment. 

I also agree with him that it’s pretty poor that firms can charge fees that are ballpark equivalent to those charged by IFA’s whilst providing a service so minimal that we get people getting into the sorts of difficulty exemplified in the OP.   

Qyburn

Nelson1100 said:

I don't ever remember L&G asking me what I wanted to be invested in. To be honest when my company first started paying in I didn't realise there was a choice, I just thought L&G took the money and they decided what to do with it, its only recently when I thought about retiring that I started to pay any attention to it.

I have every sympathy as I went through pretty much the same process. On becoming eligible for the workplace pension I had an interview with the company's financial advisor, we went through attitude to risk, overall finances, dependents, planned retirement date etc. The goal (I think) was to ensure my decision was reasonably informed, rather than to provide specific advice.

Choice of investments within the pension wasn't discussed or even mentioned.

I certainly didn't perceive any suggestion that i should seek out an independent adviser to review and revise the investment strategy.

Neither was any such suggestion made by Pensionwise a few years later.

It sounds like there could be a whole generation in the same boat, trusting in the provider and unaware that this trust is misplaced until it's too late.