Pension seems to be doing ok?

SussexChap

Hi there, I'm not looking for advice, more like opinion (although I appreciate they might be similar). 

I have a stakeholder pension from a job I left in summer 2025.  Relatively small amounts were paid in as part of my salary but about 5 years ago I started paying in extra cash to help boost the pot. In January, Scottish Widows stated that it was a pot of £49,980, giving an estimated yearly payment of £4,510 on retirement. I have paid £20,727, the employer paid £11,292 and tax relief has been £5,181. So the pot has accrued. It seems a fair rate of accruing. I intend continuing paying into this pension in the future, as anything I pay in has tax relief, which given current performance, seems to be a good idea - do people agree? I'm interested to see what people think of the performance. 

I have other pensions (this won't be my only retirement income).  

    

Marcon

SussexChap said:

Hi there, I'm not looking for advice, more like opinion (although I appreciate they might be similar). 

I have a stakeholder pension from a job I left in summer 2025.  Relatively small amounts were paid in as part of my salary but about 5 years ago I started paying in extra cash to help boost the pot. In January, Scottish Widows stated that it was a pot of £49,980, giving an estimated yearly payment of £4,510 on retirement. I have paid £20,727, the employer paid £11,292 and tax relief has been £5,181. So the pot has accrued. It seems a fair rate of accruing. I intend continuing paying into this pension in the future, as anything I pay in has tax relief, which given current performance, seems to be a good idea - do people agree? I'm interested to see what people think of the performance. 

I have other pensions (this won't be my only retirement income).  

    

It's not the pension which performs, it's the underlying funds in which you have chosen to invest (or the default option if you've not made any active investment choices).

Without knowing which funds you're invested in, nobody here can comment from a basis of fact and knowledge - it would be pure guesswork. So which funds are you actually in...? Simply knowing it's a stakeholder with Scottish Widows doesn't give the necessary information.

HedgehogRulez

Perhaps state your age and all your savings/investments/debts and you’ll get a vaguely sensible response 

Qyburn

At a glance that seems a decent rate of return. Those five years take in a bad spell in 2022.  No idea how to change that into annualised return given the contributions have been spread over those years.

coyrls

Also, it's important to know the real return as well as the nominal return.

LHW99

Given you have other pensions, is the amount you have in this one (or the amount you are likely to have when you want to stop working) likely to cover what you want to do with it?

Bostonerimus1

If we divide the total contributions made to your fund by 5 (number of years made) and then use compounding over the five years on those annual amounts it implies an average annual return of 10%. That's a good return, but to further assess performance we'll need to know the funds within the pension.

SussexChap

Thanks for your comments, everyone. The comments have made me have a look at the funds, which I can now see are split 50/50 into the Scottish Widows Pension Portfolio Two CS8, and Scottish Widows Pension Portfolio Three CS8. From the SW fact sheet, performance is ok....portfolio 2 is 61% growth over 5 years (benchmark 48%) and portfolio 3 is 47%, (benchmark 44%.). It seems they are doing ok.   

Bostonerimus1

SussexChap said:

Thanks for your comments, everyone. The comments have made me have a look at the funds, which I can now see are split 50/50 into the Scottish Widows Pension Portfolio Two CS8, and Scottish Widows Pension Portfolio Three CS8. From the SW fact sheet, performance is ok....portfolio 2 is 61% growth over 5 years (benchmark 48%) and portfolio 3 is 47%, (benchmark 44%.). It seems they are doing ok.   

That's fine, and isn't far off my estimate as that looks to be a 9% average annual return, but how are those portfolios invested? You should know why you are investing in them and be able to explain your strategy.

Dugal

Based on my experience w8th SW there will probably be a Portfolio One CS8 which will be heavily/100% invested in equities with Two and Three in decreasing proportion of equities.  This is possibly a 'Lifestyle' arrangement which reduces the investment risk as you approach stated retirement age.

Rattusnorvegicus

Since youre invested in products, it should be noted those are only notional values. Its not real money until you sell the assets for cold hard cash. People confuse pot balance with entitlement to that amount like in a savings account, whereas it actually reflects current valuation.

The vallue of stuff can go down as well as up.

Generally though the last 5 years, excluding 1996-2000 have been one of the best times ever to invest, which leads to unrealistic expectation of future outcome.

Unpopular views i know, but someone has to say it.