Average return from SIPP

Skinnydad · 16 April 2018 at 11:27AM

I currently have 200k in an Aegon SIPP, aged nearly 60 and I understand that my investment can go down as well as up. I just don't think I'm getting a good return on my money. When I've spoken to them their only advice has been to manage it myself. Alas I don't have the knowledge or confidence to perform this. I'm not even sure how to work out what the return is exactly. What average return (on a med risk) could be expected from the marketplace in general. I'd just like to make my money work as hard as possible whilst in this vehicle. I understand that there are probably many permutations and variables to take into account, however I'm just talking ballpark average. Any thoughts/advice would be appreciated. Thanks..

kidmugsy · 16 April 2018 at 11:41AM

Why do you think that an average, based on the history of one stock market or another, is of any use to you?

Skinnydad · 16 April 2018 at 12:05PM

Thanks Kidmugsy that's my problem I just don't know. should I be able to get 5% a year on 200k more or less. I need to be able to do some serious sums and find out what it is exactly making for me. I'm currently paying 1K a month into it...

Prism · 16 April 2018 at 12:14PM

Lots of variants, however over the last 10 years a top performing balanced fund would have made about 7.5% per year. Aegon's balanced lifestyle fund has made about 5.7% per year. There will be other funds that have done worse. Aegon might well out perform the others over the next 10 years

One thing that could help explain a little of the underperformance vs the best fund is Aegon lifestyle funds seem more exposed to the UK which has struggled over recent times. Others have been more exposed to the US. Maybe it will do better in the future as UK might out perform the US. On the other hand.....

I would leave it as it is unless you want to learn about this stuff first and manage your own funds

For reference your fund should be somewhere in this list

https://www.trustnet.com/fund/price-performance/p/pension-funds?manager=SCOE&tab=myCustomTab&pageSize=100&sortby=P120m&sortorder=desc&sector=P%253ACMG%252CP%253ABAL

Thrugelmir · 16 April 2018 at 12:29PM

What's your personal objective? There'll always be something else that has performed better. The art is not lose money. Simply keep growing your funds nice and steady.

dunstonh · 16 April 2018 at 1:05PM

I just don't think I'm getting a good return on my money.

How are you working that out?

When I've spoken to them their only advice has been to manage it myself.

SIPP stands for SELF INVESTED personal pension. So, its either you or your adviser, if you have one that makes the decisions. Not the SIPP provider.

I'm not even sure how to work out what the return is exactly.

So how are you able to decide if its good or bad?

What average return (on a med risk) could be expected from the marketplace in general.

One person's medium risk is another person's low risk or high risk. What is your definition of medum risk. For example, in our risk scale, we have four medium risk classifications and the difference in equity is 40%. That makes a massive difference to the returns. So, context is needed.

I understand that there are probably many permutations and variables to take into account,

About 30,000 investment options available to the SIPP with a nearly infinite number of variations.

however I'm just talking ballpark average.

Perhaps the best place to start is to tell us what investments you have. Then we can see if they are "medium risk".
And what period are you measuring it over? (e.g. if its just 12 months then you would expect it to be low. Its 5 years,10 years or whatever, then its very different)

Dox · 16 April 2018 at 1:22PM

Skinnydad wrote: »

I currently have 200k in an Aegon SIPP, aged nearly 60 and I understand that my investment can go down as well as up. I just don't think I'm getting a good return on my money. When I've spoken to them their only advice has been to manage it myself. Alas I don't have the knowledge or confidence to perform this.

Then why have you got a SIPP without the benefit of advice from someone who does know what they're doing (i.e. a financial adviser)?

Skinnydad · 16 April 2018 at 3:43PM

This is a company SIPP, therefore managed on your behalf. I'll dig out the figures and get concise figures to the forum once I get my head around this. The position I'm in is I'm 60 in 2 months and was wondering if I could retire and live comfortably. My target is to project to 85 and I'd like to get after tax deductions at the least £2200 a month. We are Mortgage free, no debts and 100K in the bank. our state pensions pay out at 66. OH reasonably financially secure and I'm not taking her contributions into account at present. This is what I have:

(1) Savings 100k
(2) In AEGON I have a money purchase scheme (I thought it was a SIPP) this is worth 200K
(3) A pension in the PFF that can be paid just now with a value of £8,100 or deferred to a later date
(4) A pension with Santander that will pay at 60 £6,300 or £4,600 if I tax the 25% TFLS. Can't defer
(5) I have a small FS pension to the value of £47K which I intend to leave to grow
(6) Hopefully I'll receive the SP at 66 which will be approx. 8K a year

So my long term goal is to see if I can get £2,200/300 a month if at all possible..

I was thinking of deferring the PPF pension (3) for a couple of years say until 62

I was thinking of taking the TFLS from Santander (4) as I'll need to live till about 85 to break even or is this naive of me?

The small pension of 47K (5) I was going to leave as the company wanted to close it down and they provided financial advice. I was advised at the time if I don't need it to leave it as after 60 years of age this will grow by 7/8%

The reason I asked about the Aegon money purchase scheme and returns is that in Jan 2017 I had £168K in it as of today I have £190K in it. Between Jan17 and Mar18 I've invested 15K, therefore see's a return of 7K. Unless I've got my sums wrong...

Thanks in advance..

TadleyBaggie · 16 April 2018 at 3:49PM

I drawdown 4.5%, since inception my fund has steadily increased. This was a £227K pot at the start, now worth £242K.

dunstonh · 16 April 2018 at 3:57PM

was thinking of taking the TFLS from Santander (4) as I'll need to live till about 85 to break even or is this naive of me?

The statement examples are not to be relied on. They use assumptions that rarely fit reality. They also assume annuities but most people are not buying annuities nowadays.

So, relying on duff info to make a decision is not a good idea.

The reason I asked about the Aegon money purchase scheme and returns is that in Jan 2017 I had £168K in it as of today I have £190K in it. Between Jan17 and Mar18 I've invested 15K, therefore see's a return of 7K. Unless I've got my sums wrong...

The stockmarkets recently fell by 10%. Yet you have seen a 7k gain.

At this stage, I think you either need an IFA or you need to more research and understanding of what you have and what is available. Stop treating the plans in isolation. Consolidation is likely to be better with a couple of them and then using them to meet your objectives and needs. The mix and match approach is fudging it and making it more complicated than it needs to be and likely to lead to poor outcomes.

Prism · 16 April 2018 at 4:03PM

Skinnydad wrote: »

The reason I asked about the Aegon money purchase scheme and returns is that in Jan 2017 I had £168K in it as of today I have £190K in it. Between Jan17 and Mar18 I've invested 15K, therefore see's a return of 7K. Unless I've got my sums wrong...

Thanks in advance..

Thats about right. Pretty low global equity returns over the last year or so, mainly due to the last three months. The FTSE 100 has been particularly poor, partly due to the steadly increasing pound.

Average return from SIPP

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