Standard life pension statement.

dekh

Got my standard life pension statement this morning. Made me laugh - in a bad way.

Taking out this years payments and government contribution for tax my pension fund grew by a whopping 0.002% (yeah I checked the numbers).

It grew by more in the first year when I had a ton of fees to pay off at the same time, that must have been 10 years ago now.

Wish I'd not bothered with a pension at all. I should have just put money into the mortgage instead, I'd be well on the way to mortgage free by now. Certainly less than 15K to pay off.

And before you say - serves you right. I never got a vote in the floatation and didn't get any money from it either.

One of the reasons for picking SL in the first place was because there were no greedy shareholders to pay.

I would love to take all the money out pay the income tax back to the government and stick what's left into the house

They fail to tell me what the "management fees" are, bet they still get a big slice of pie whether the fund is managed well or not. I'll have to see if I can find out what that is.

Sorry for the moan.

EdInvestor

A personal pension is just a tax wrapper, it doesn't make or lose money. How the money is invested is up to you, and this is what determines the pension's value.

Which funds have you chosen?

dunstonh

Taking out this years payments and government contribution for tax my pension fund grew by a whopping 0.002% (yeah I checked the numbers).

Thats not bad then. 2007 was generally a bad year for investments unless you took a higher risk.

It grew by more in the first year when I had a ton of fees to pay off at the same time, that must have been 10 years ago now.

Ahh, so its an old fashioned pension then.

Wish I'd not bothered with a pension at all. I should have just put money into the mortgage instead, I'd be well on the way to mortgage free by now. Certainly less than 15K to pay off.

Great idea. Then when you get to retirement and the state pension pays you £4500 a year, you can then sell the property or equity release it because you cannot live on such a low income.

Sorry for the moan.

No harm in moaning but it does help to understand that you are responsible for the choice of where your pension is invested. You chose the fund or funds and if it hasnt performed as you would want then its your choice. Perhaps you should have taken more core in choosing where it is invested. Something you still are able to do.

BTW, your mortgage payments have probably averaged around 5-6% a year for the last 10 years. Your pension has outperformed that (assuming with profits as you mention voting rights).

dekh

I mentioned I had no voting rights.

I took financial advice and was told this was the best option.

I took financial advice because I couldn't even pretend to understand what the options are.

I can't see .002% being a good return when saving after tax would be ~4%?

If the options were - Personal pention or pay off mortgage 10 to 15 years early. Well if I'd realised I would have chosen the latter.


Better on £4500 being eligible for all the state benefits than on £6500 and being eligible for no state benefits and still paying tax.

dunstonh

I can't see .002% being a good return when saving after tax would be ~4%?

Investments do not go up in a straight line. They zig zag and you look at the average. For the 5 years before 2007 I was getting in excess of 20% a year. However, the last few months has seen losses. I dont now panic because of the loss. Its normal and expected.

If the options were - Personal pention or pay off mortgage 10 to 15 years early. Well if I'd realised I would have chosen the latter.

Even though you have made more on the pension than you would have saved on the mortgage?

Better on £4500 being eligible for all the state benefits than on £6500 and being eligible for no state benefits and still paying tax.

The state benefits would increase that £4500 to around £6500 for a single person. Plus, benefits are not reduced £1 for £1 on your pension income. Plus you wouldnt be paying tax until you get over the £10k mark (as it will be in a couple of years).

If you want to plan to be poor then dont make retirement provision. That is basically what you are saying.