Is Your SIPP Pension Making Any Money?

mad1_2

Dear all

I'm coming up for 61 years old, have a SIPP pension with funds invested via a firm of financial advisers. I switched my pension to them in early February 2023 as I wanted to combine my pensions into one pot and my existing provider didn't want to help.

I have a 'low/medium' risk profile and from Feb 23 up to today's date my pension has achieved 0.86% growth. I have a pot of under £185k.
I am aware that pensions have been under pressure and a pension is a long-term investment, but I wondered if anybody else's pension has performed better than this from Feb 23 - present day, with a low to medium risk profile?

My plan is to retire at 67 years old, so I don't have too long before I will be drawing down on my pension.  

It would be great to get a rough benchmark from 'real' people here.

Thanks in advance.

gravel_2

What are you invested in?

Stubod

"Is Your SIPP Pension Making Any Money?"

..yes...about 5% since I ditched our FA and went self managed with HL.....

artyboy

About 18% up over the time period you
mention, but I'm willing to accept more risk than you. Hopefully you'll be better cushioned than me should another correction/crash come soon. Otherwise I would be questioning your choice of investments... because even a low risk money market fund would have made you over 6% in that time...

Roger175

Yes my SIPP is making good money. Difficult to be precise, because I'm adding money from time to time and have recently done a number of transfers to get it all with one DIY platform (AJ Bell in my case). But a rough calculation indicates I have achieved an average of between 8-9% growth over the last 10 years or so. In the period you are referring to, definitely more. 

I would be exceptionally disappointed in your case, but I suspect the problem is your choice to stick with low/medium risk, combined with the issue of fees. 

When you say you will be drawing down on your pension at 67, what are you referring to? Will you be looking to buy an annuity or doing some form of Drawdown? If the latter, then your funds will be invested for a considerable time (deep into retirement) and you could perhaps afford to be a little less risk adverse.

Alternatively, you could currently be earning around 5% in a short term money market fund which makes your 0.86% seem pretty dire. Obviously you are talking about a relatively short time period since you amalgamated, but try to get a better understanding of what you're invested in and whether it really suits your needs.

leosayer

My high risk assets (invested in global equity index funds) went up 21.8% in that period.
My low risk assets (invested in money market and short term gilt funds) went up 5.8% in that period.

MK62

As mentioned above, with the information given we can only guess at the likely cause being a combination of poor returns on lower risk assets and fees/charges.

mad1_2

Roger175 said:

Yes my SIPP is making good money. Difficult to be precise, because I'm adding money from time to time and have recently done a number of transfers to get it all with one DIY platform (AJ Bell in my case). But a rough calculation indicates I have achieved an average of between 8-9% growth over the last 10 years or so. In the period you are referring to, definitely more. 

I would be exceptionally disappointed in your case, but I suspect the problem is your choice to stick with low/medium risk, combined with the issue of fees. 

When you say you will be drawing down on your pension at 67, what are you referring to? Will you be looking to buy an annuity or doing some form of Drawdown? If the latter, then your funds will be invested for a considerable time (deep into retirement) and you could perhaps afford to be a little less risk adverse.

Alternatively, you could currently be earning around 5% in a short term money market fund which makes your 0.86% seem pretty dire. Obviously you are talking about a relatively short time period since you amalgamated, but try to get a better understanding of what you're invested in and whether it really suits your needs.

Thanks Roger - I'm looking to drawdown when I'm 67, not buy an annuity. On your DIY platform, presumably you are making the decisions on where your pension is invested?

mad1_2

gravel_2 said:

What are you invested in?

Thanks Gravel 2 - below is a breakdown:

Asia Pac (inc Japan) Equity £20,640.36 11.41%

Cash £8,012.78 4.43%

Emerging Markets Equity £803.88 0.44%

European Equity £15,119.38 8.36%

Global Bond (Ex UK) £49,663.33 27.44%

Other £11,175.77 6.18%

Property £933.10 0.52%

UK Equity £27,262.02 15.07%

UK Government Bonds £19,065.59 10.54%

UK Index Linked Bonds £1,078.77 0.60%

US Equity £27,202.79 15.03%

dunstonh

Is Your SIPP Pension Making Any Money?

The correct answer for everyone would be no.    SIPPs do not make money. SIPPs are a container for investments and it is the investments that make money.  SIPPs have over 30,000 investment options.    Some of which will be better than others.     Many will perform better than others in one period and worse than others in different periods.

I am aware that pensions have been under pressure and a pension is a long-term investment, but I wondered if anybody else's pension has performed better than this from Feb 23 - present day, with a low to medium risk profile?

Pensions have not been under pressure.  However, investments are long term.    Seeing as you say you know that, why are you looking at a very very short term period and questioning the performance?

The period in question has been very good for stockmarket but pretty flat for bonds.   As a low to medium risk investor, you would be heavier in bonds.   So, your returns would be lower than someone that is heavier in the stockmarket.

To give you an idea of the difference, here is a chart from Feb 2023 showing a bonds spread (all low risk types of bonds) in blue and a global equities spread in green



You are heavier in the blue than you are in the green but those responding are heavier in the green.

Thanks Roger - I'm looking to drawdown when I'm 67, not buy an annuity. On your DIY platform, presumably you are making the decisions on where your pension is invested?

What you tend to find with the regulars on this site who DIY is that they are more experienced investors who will be heavier in the stockmarket than you are.    And the last year and a bit has been a very good period for stockmarket.

Also, in Feb 2023, you would have had the advice firm fee.  So, you would have gone negative before you started.  So, you should factor that step backwards into the equation.

TadleyBaggie

Close to 20% since I switched platforms about 18 months ago.