Pension Provider investing 30% of my Pension in a Fund performing worse than -20% for 3 1/2 years!!!

QrizB

Marcon said:

artyboy said:

Am I the only person wondering where "Odiham" is?

Try google (spoiler alert: Hampshire. It's the main base RAF base for Chinook helicopters).

I used to work with a guy who, in an earlier career, had been a helicopter maintainer at Odiham.

And I think he had a SW pension.

I don't think this is him; he was relatively level-headed!

EthicsGradient

Marcon said:

OP - I've just read the Pension Investment Approaches guide written by your provider (it's online). It is beautifully clear and explains things straightforwardly and helpfully.

Have you read it? I think possibly not, so now might be a good time.

I took a look at it too (assuming it's the SW one). While the plan for targeting an annuity looks fine, I was surprised that their "adventurous" option, targeting flexible access retirement income, still aimed for, at the point of retirement, 44% bonds, 29% shares, and 27% cash (of which I think the idea is 25% will be taken as a tax free lump sum). Having 50% more bonds than shares doesn't seem that "adventurous" to me. The 'balanced' and 'cautious' options for flexible access end up at the same amount; it seems SW allows those earning to choose to be adventurous, but not those in retirement (and such an adventurous person might now be feeling miffed if they had been forced into bonds and then the 2022 drop happened to them). If it was your only source of income, that could be understandable; but almost everyone gets the state pension, and you'd think they'd have an option for people who also have some other income, such as a small DB pension. (However, I think it's dated 2020, so they may have changed things since then.)

However, this has at least made me think about preparing for taking a 25% lump sum from my SIPP, and how it might be wise to build up to that 25% in money market funds over a few years, rather than just cashing in equities at one moment. So this thread has been useful for me.

valefan67

So, as others have suggested, you will probably find that your fund has dropped because it is bond-heavy and inflation has increased.  However, because inflation has increased so will the annuity amount your pot will buy; so have you really lost out? 

If you don’t want an annuity, but didn’t tell your pension provider, then I’m afraid there’s only one person to blame for that…

Hoenir

valefan67 said:

So, as others have suggested, you will probably find that your fund has dropped because it is bond-heavy and inflation has increased.  However, because inflation has increased so will the annuity amount your pot will buy; so have you really lost out? 

Bonds will also ultimately recover in value as maturity date approaches. Helping to smooth out the medium term volatility of the equity markets. 

dunstonh

And no response from Mr Angry.     No surprise, as it appears the vent was the objective of the post and not to learn from others and understand what happened.

af1963

dunstonh said:

And no response from Mr Angry.     No surprise, as it appears the vent was the objective of the post and not to learn from others and understand what happened.

Hopefully it made him feel a bit better.  Also hopefully, he hasn't rushed off and pulled all his funds out of the pension protector fund , and piled into a "high performing" US tech fund, based on the last few years' performance figures,  just in time for a market crash, a drop in annuity rates, and an increase in the value of bonds ...

I do have a bit sympathy with him though, if his report of the pension provider's responses is anywhere near what they said. None of their explanations get close to making it clear that what has happened is that the 'pension protector' has protected the value of his pension annuity, as it was supposed to.

A worked example (ideally with figures from his own policy, but even just with a notional fund value), showing the annuities it could have bought in 2021 with the original amount, and in 2025 with the reduced fund value, would  maybe have helped more than a generic "funds can go up or down, not our problem guv".

Marcon

af1963 said:

I do have a bit sympathy with him though, if his report of the pension provider's responses is anywhere near what they said. None of their explanations get close to making it clear that what has happened is that the 'pension protector' has protected the value of his pension annuity, as it was supposed to.

A worked example (ideally with figures from his own policy, but even just with a notional fund value), showing the annuities it could have bought in 2021 with the original amount, and in 2025 with the reduced fund value, would  maybe have helped more than a generic "funds can go up or down, not our problem guv".

He wouldn't have listened. His provider has written an excellent guide explaining exactly how the Pension Protector works. They aren't resourced to do the sort of hand-holding you suggest, but that's what this site can do - if someone stops ranting long enough to stop and read...

Juno_Moneta

Wow it was heavy going reading all that, however OP wins 2 awards:

* Most amusing user name of 2025 : Mr_Angry_from_Odiham

* Heaviest use of bold accent in a post of 2025

Congratulations, and on a serious note OP - I hope you manage to get invested into something that you are more comfortable with, it might take some effort on your part but is possible.