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  • FIRST POST
    • Skinnydad
    • By Skinnydad 16th Apr 18, 11:27 AM
    • 55Posts
    • 1Thanks
    Skinnydad
    Average return from SIPP
    • #1
    • 16th Apr 18, 11:27 AM
    Average return from SIPP 16th Apr 18 at 11:27 AM
    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..
Page 1
    • kidmugsy
    • By kidmugsy 16th Apr 18, 11:41 AM
    • 10,377 Posts
    • 7,067 Thanks
    kidmugsy
    • #2
    • 16th Apr 18, 11:41 AM
    • #2
    • 16th Apr 18, 11:41 AM
    Why do you think that an average, based on the history of one stock market or another, is of any use to you?
    Free the dunston one next time too.
    • Skinnydad
    • By Skinnydad 16th Apr 18, 12:05 PM
    • 55 Posts
    • 1 Thanks
    Skinnydad
    • #3
    • 16th Apr 18, 12:05 PM
    • #3
    • 16th Apr 18, 12:05 PM
    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
    • By Prism 16th Apr 18, 12:14 PM
    • 291 Posts
    • 208 Thanks
    Prism
    • #4
    • 16th Apr 18, 12:14 PM
    • #4
    • 16th Apr 18, 12:14 PM
    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&so rtby=P120m&sortorder=desc&sector=P%253ACMG%252CP%2 53ABAL
    • Thrugelmir
    • By Thrugelmir 16th Apr 18, 12:29 PM
    • 58,204 Posts
    • 51,577 Thanks
    Thrugelmir
    • #5
    • 16th Apr 18, 12:29 PM
    • #5
    • 16th Apr 18, 12:29 PM
    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.
    Financial disasters happen when the last person who can remember what went wrong last time has left the building.
    • dunstonh
    • By dunstonh 16th Apr 18, 1:05 PM
    • 92,198 Posts
    • 59,357 Thanks
    dunstonh
    • #6
    • 16th Apr 18, 1:05 PM
    • #6
    • 16th Apr 18, 1:05 PM
    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)
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Dox
    • By Dox 16th Apr 18, 1:22 PM
    • 352 Posts
    • 199 Thanks
    Dox
    • #7
    • 16th Apr 18, 1:22 PM
    • #7
    • 16th Apr 18, 1:22 PM
    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.
    Originally posted by Skinnydad
    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
    • By Skinnydad 16th Apr 18, 3:43 PM
    • 55 Posts
    • 1 Thanks
    Skinnydad
    • #8
    • 16th Apr 18, 3:43 PM
    • #8
    • 16th Apr 18, 3:43 PM
    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
    • By TadleyBaggie 16th Apr 18, 3:49 PM
    • 2,710 Posts
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    TadleyBaggie
    • #9
    • 16th Apr 18, 3:49 PM
    • #9
    • 16th Apr 18, 3:49 PM
    I drawdown 4.5%, since inception my fund has steadily increased. This was a 227K pot at the start, now worth 242K.
    • dunstonh
    • By dunstonh 16th Apr 18, 3:57 PM
    • 92,198 Posts
    • 59,357 Thanks
    dunstonh
    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.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Prism
    • By Prism 16th Apr 18, 4:03 PM
    • 291 Posts
    • 208 Thanks
    Prism
    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..
    Originally posted by Skinnydad
    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.
    • Skinnydad
    • By Skinnydad 16th Apr 18, 4:38 PM
    • 55 Posts
    • 1 Thanks
    Skinnydad
    Sorry Dunstonh these are not projections these are the actual figures I have received from Santander and the PPF as these can both pay out 60. which for me is 2 months time and the correspondence has just came in. The 190K is hard fact todays figures and the 47K was a figure from 2 years ago (as I'm not relying on this I've asked for an updated projection). So I can't see why you'd say they are assumptions? The state pension does pay out at 66 for me... As for consolidation.if you mean bringing together then I don't believe the PPF allows you to take all your money out from them? Aegon will not accept DB schemes. This leaves me in the position I'm in. Sorry but it just where I'm at, at present. I didn't realise the stock market had taken a 10% dive, and taking your experience into account then a 7K return over 15 months is good! Thanks again.
    • dunstonh
    • By dunstonh 16th Apr 18, 4:42 PM
    • 92,198 Posts
    • 59,357 Thanks
    dunstonh
    Sorry Dunstonh these are not projections these are the actual figures I have received from Santander
    Even if they are not projections, it will be annuity as Santander dont offer drawdown.

    Aegon will not accept DB schemes.
    They do under advice but consolidating your DB schemes may not be appropriate. Consolidating the DC schemes though maybe. Having one money purchase fund is so much easier in drawdown.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Brynsam
    • By Brynsam 16th Apr 18, 7:18 PM
    • 762 Posts
    • 477 Thanks
    Brynsam
    This is a company SIPP, therefore managed on your behalf.
    Originally posted by Skinnydad
    I think you might be confusing 'manage' with 'administer' - surely your employer isn't taking your investment decisions...?
    • Skinnydad
    • By Skinnydad 16th Apr 18, 9:48 PM
    • 55 Posts
    • 1 Thanks
    Skinnydad
    Yes administered..apologies. Thanks Dunstonh it's not a Santander scheme, I believe it's an old Abbey Scheme as they took over Abbey National. It's not an annuity its a FS pension I believe. As for Aegon I'm in a vehicle called Retiready pension at this states:


    We accept transfers from the following types of pensions:
    • Personal Pension (Group, individual and self-invested)
    • Stakeholder (Group and individual)
    • Money purchase occupational pension scheme (unless you have a fixed or guaranteed benefit)
    Retiready cannot accept transfers from defined benefit pension schemes (often called 'final salary' pension schemes).


    So for me I have the Pension protection fund, Santander (aka Abbey DB) and Aegon Retiready


    I was just trying to work out the best method if it was possible to meet my financial goal of 2200/2300 per month... Thanks again....
    • Potboiler
    • By Potboiler 16th Apr 18, 10:59 PM
    • 6 Posts
    • 2 Thanks
    Potboiler
    My SIPP has lost approx 4% in the last year. Invested in low cost Lifestrategy/HSBC balanced funds. Mainly due to increased volatility/appreciation of sterling in last two months.
    • kinger101
    • By kinger101 16th Apr 18, 11:16 PM
    • 4,137 Posts
    • 5,625 Thanks
    kinger101
    What will you get from your state pension? The full new state pension at 65 is 164.35 a week which translates to 8,600 per annum.

    To get 2,300 a month, you need 31,538 income

    Taxable income = 31,538
    11,850 @ 0% = -0
    19,688 @ 20% = -3938
    Net income = 27,600 or 2,300 pcm

    8,600 state pension (once you're entitled) + 4,600 Abbey + 8,100 PFF = 21,300. That leaves 6,300.

    From 200K AEGON, 100K savings and the Abbey TFLS (?).

    Ignoring the Abbey, which you've not given a value for, you'd take 50K tax free from AEGON. That leaves 150K. At 4%*, that's 6K. And 150K in the bank to tide you over until the pensions kick in. In those years, draw down up to the personal allowance.

    Personally, given the heavy weighting of the state pension and defined benefit, I'd leave it heavily investing in shares, keeping only rainy day money plus 3-4 years the amount you need in addition to the state/DB pension to tide you over and ride out dips in the stock market.
    Drawdown and stick in stocks and shares ISAs if needed.

    *4% might be regarded as excessive, but you can easily rebalance based on investment performance, given most your income is defined.
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