To ask for help re pension as it keeps going down!

[ImsorryWilson]

I have a pension pot of about £200 and frankly it’s entirely pointless other than in respect of the tax relief! Most years since I started paying into it it seems to go down (so if it wasn’t that I keep putting more £ in it would have gone down in absolute terms in several of the past few years).

It’s in two old workplace pensions that I’ve kept going after they were set up by employers. And they are as bad as each other! I have checked the fees and got rid of the “advisor” fee (since this was just inherited from employment and I wasn’t actually getting any advice)

I’m already 50 so I need to just get control of this. I hope to earn well for another 10 years.

I saw on one of them that there was a score from 1 to 7 for turbulence/risk and mine was a 4. Is the first thing to do to message them and reduce that score?

To add insult to injury I checked what the bigger pot is invested in and it’s bloody cigarettes!

In all honestly I’d almost rather have paid the tax...

I have found the problem a bit overwhelming and would appreciate guidance on what to do first. Thanks in advance.

Sorry! 200k.

The best forum I found for pension stuff was the MSE Pensions threads. Really excellent input from financial advisors, pension administrators etc.

I learned more about pensions from them than I ever did from my employer/union/pension admin.

forums.moneysavingexpert.com/categories/pensions-annuities-retirement-planning

Transfer it into a sipp. I have a similar sized fund and it's gone up 10% over the last year in spite of covid.

thank you.

not sure if I'm just making mistakes or if all pensions are performing badly....

@solicitoring

Transfer it into a sipp. I have a similar sized fund and it's gone up 10% over the last year in spite of covid.

This!

Works well despite covid

thank you.

sorry to ask such a basic question but why has yours gone up? Do you keep an eye on it and switch funds around? Or is it just the switching into the SIPP by itself that makes a difference?

I'd love to get away from the cigarette investment if nothing else!

Not massively. I've got most in a vanguard fund. But my emerging market fund has done amazingly. I wish I had dumped the lot in that - it's up 33%.

thank you.
I will transfer money in before the end of year but then transfer into SIPP.
Bizarrely I work in emerging tech ...... I'm a silly person aren't I.

Sounds like the funds you are in are not very good.

I would either re engage with a FA and get them to rejig the funds or consolidate.

If you want to do it yourself but have no understanding then it would make sense to be very diversified.

Choose your level of risk (cautious, medium, higher)

Stick it in a a globally diversified tracker.

Vanguard Lifestrategy funds are a good starting point. Their 60% fund is medium risk if that’s what you are. 18% up over 3 years, 54% over 5 years.

If you don’t like tobacco/Oil etc then you may need to look into ethical funds - may need a FA to help you with that.

Mine went down massively due to Covid, I expect it to rise again. Low risk investments won’t bring much return, you have ten years so I’d stick at a medium one. Not an expert though

I have four that add up to a similar amount. My all plummeted over the past year but as soon as Brexit deal went through they have bounced back and are now higher than they ever have been. They also go up a bit each year. It doesn’t sound like the money is being managed v well. £200,000 is quite a bit amount so I would make a change of some kind but I can’t advise what.

I need to sort my pension.
As does Dh.
Reading.

I moved one of mine so my IFA could shuffle the funds about more easily based on my risk assessment. I use a high risk strategy and I do pay for ongoing advice on funds.

My IFA gave us an overview on the pension and funds that they were invested in and the pros and cons of moving them along with ongoing fees.

Check the feeds that you’re paying on your pension. A lot of managed funds have high fees and that really eats away at your profit.

Through work I have my pension fully invested in an index fund that tracks the S&P 500. I’ve also got a private pension in a vanguard fund and neither has not gone down this year. I’m partly invested in an index fund that tracks the S&P 500 (S&P and Nasdaq hit many highs last year ), partly invested in thematic funds (innovative tech in the US). I do this through SIPPs in vanguard and my ISA in interactive investor (II also offers a SIPP and you have much more choice than vanguard). The SIPP is your vehicle, but you still need to choose the right investment to put in that vehicle. I don’t change my investments very often, but I do watch them, and I always invest (same monthly contributions even if people are selling). Stock markets (in the US) had a very good year last year, as did thematic investments (tech, emerging markets, clean energy).

I’m about 10 years younger than you and all my investments are at 7 (I’ll be invested in the markets for another 20 or so years, so for now, I have take that risk in favour of growth).

The Financial Times has great podcast called The Money Clinic, if you go through their archives, you can find a lot information around pensions. Hope this helps!

I've recently consolidated four legacy work pension schemes with the help of a very good IFA (probably not allowed to name them directly on here).

You can choose how you invest - I have mine invested in ethical funds, so green energy etc. However, they are quite high-risk and not to everybody's choice, especially if you are, with respect, closer to retirement age. A good adviser will help you assess your risk profile.

I chose to go through an adviser as I am, quite frankly, ridiculously financially lazy and wanted somebody to do the heavy lifting for me, but if you'd prefer to DIY, the Money-Saving Expert forums are a great source of knowledge and advice.

Agree with others, check the funds, mine plummeted after March, covid but USA stocks buffeted that. You need a few, maybe 6?different funds and investment.

To balance each other out and I have vanguard life stragety 100% equity in sipp and 80/2o in my isa.

Both went up, sipp and isa after covid.

Thanks for the great replies. I simply must sort this out before 5th April it’s bonkers!

Re ethical, I’m fine with BP,etc, it’s tobacco where I draw the line.
I work with tech cos and have negotiated with BP....... let’s just say I’m ok with BP :)

I’ve recently transferred all mine to Nutmeg, where you can choose your level of risk and they select the funds. 2020 was a rocky ride but that’s the nature of investing for growth, i still have 20 years probably until retirement so can afford the ups and downs.

Hey OP, as something me who used to work in pensions and has a small pension (that's grown quite a lot so far):

• if you do decide on a SIPP, be mindful of some of the high charges for individual funds
• if you do use advice of the IFA choose wisely as from my experience many of them are awful and not worth the money

Before you do anything I'd consider if there's a specific reason it's going down? Best not to pull out before getting a return.

Diversifying funds (geographically and by type) is always a good idea.

Past performance is not an indication of future returns but I like to look at the last 5 years return on the fund, or you can also research fund managers that tend to manage well performing funds.

Also just to add high risk is good if you have time until retirement. Some funds can be selected in a way where your risk goes down with time to retirement.

Lower risk equals lower returns. I've noticed at a risk of 6 and 7 my funds despite sometimes being volatile have performed great (but I have lots of time until retirement so can take the risk).

If you consolidate both pensions into one plan (depending on your pensions) you can also count on a better return possibly as you can buy more units in the consolidated plan with existing pension money you transfer in.

Thanks will read and reflect