How to understand SIPP statement

EdithSitwell

This is the most 101 question ever and I actually feel embarrassed asking it. When my quarterly SIPP statement gives projections for what the fund could be worth at retirement, would anyone who knows about this stuff be able to tell me will that be for just the fund as it stands at the statement date, excluding future contributions? As in if I never paid in anything else, the fund as it stands today could be worth x, y or z?

Smudgeismydog

This would be better under the Pension Board. 

Are you currently paying into your SIPP? If so, then it is likely the projections assume these will continue until the selected retirement date. 

El_Torro

Who is your SIPP with? Telling us this might give you a more specific response. 

Looking at my Hargreaves Lansdown SIPP the annual statement tells me what my SIPP will be worth at my chosen retirement date (not necessarily the same date as when you start collecting your state pension). It assumes no further contributions and it also says on the statement what they are assuming for inflation and for investment growth. The investment growth seems to be calculated based on what funds I currently hold. 

I wouldn't put too much stock on projections from SIPP statements. Better to make your own projections using one of the many free pension calculators you can find online. 

dunstonh

When my quarterly SIPP statement gives projections for what the fund could be worth at retirement, would anyone who knows about this stuff be able to tell me will that be for just the fund as it stands at the statement date, excluding future contributions?

You need to look at the assumptions provided with the statement.  Typically, they do include current contributions but some do two projections. Paid up and continuing.

Albermarle

Also the projections include some assumptions for investment growth. Often there will be projections based on high, medium and low investment growth.

Then they also take an estimate of inflation into account, so you get a projection based on 'real money'.

For example if your retirement date is in 10 years time and the projected size of the pot was £100,000.
Then if inflation was estimated at 3% a year, then by the time you retire that £100,000 would only have the spending power of £70, 000 compared to today. ( So simply you need at least 3% investment growth to keep standing still.)