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Original poster

Pension lost £25,000 in 2022

48 replies

talkingfarm · 01/02/2023 14:55

Ahhhh not sure what to do - since my divorce my pensions have been managed by a single company.

They grew by £13k in 2021, but are down by £25k in 2022. I work full time and pay in 8% of my salary, plus 6% from employer.

So to be this far down is horrendous - I will speak to them about it, but I'm sure they'll say 'market conditions'

Total fund value is only £80k, so these are massive losses.

Just wanted to sense check if this seems normal- and do you think there's any way I'd get my money back?

OP posts:
SeasonFinale · 01/02/2023 14:57

Pensions should always be looked at over the long term so unless you are going to retire in the next couple of years ride out the storm. However you can see an IFA if you feel you need plan specific advice.

MrLbz · 01/02/2023 15:01

Totally normal, yes over the next few years it will all come back and more.

CleaningOutMyCloset · 01/02/2023 15:03

Pensions, as a pp said, are long term investments. Unless you're in the last few years of working I'd not worry about it, it will recover

Oblomov22 · 01/02/2023 15:13

That is a huge loss though. Are we supposed to annually review and adjust if it's a big loss? My pension I'm sure I originally chose how 'risky' I wanted to be in my choices.

justanotherdaduser · 01/02/2023 15:16

talkingfarm · 01/02/2023 14:55

Ahhhh not sure what to do - since my divorce my pensions have been managed by a single company.

They grew by £13k in 2021, but are down by £25k in 2022. I work full time and pay in 8% of my salary, plus 6% from employer.

So to be this far down is horrendous - I will speak to them about it, but I'm sure they'll say 'market conditions'

Total fund value is only £80k, so these are massive losses.

Just wanted to sense check if this seems normal- and do you think there's any way I'd get my money back?

I am afraid this is not outside the norm for 2022 depending on where it was invested.

For context, US large cap equity index,S&P 500 lost just over 18% and UK government bond funds lost around 30% in 2022.

FTSE 100 (uk large cap index) on the other hand made a small positive return.

So depends on where your pension was invested.

That said though, despite what others said, 25% loss in value to my mind is high and maybe your pension is invested into a narrow area? Certainly worth finding out and see it it makes sense to diversify holding.

thetailorofgloucester · 01/02/2023 15:16

You can thank Truss and Kwarteng for most of that loss. My pension lost a similar amount but is beginning to regain again now. If you look at the trends over the long term it is more realistic.

Christmasbaubleswithtinselon · 01/02/2023 15:19

Time in the market is key. The biggest gains usually occur when the market has been volatile but don’t take the advice of strangers, see an adviser. Is your attitude to risk still valid, what are your long term plans etc. have a conversation specific to your own goals. But don’t panic

Emanresu9 · 01/02/2023 15:22

And guess what. The pensions company still take a large fee off you for the year despite making a loss.

bigbluebus · 01/02/2023 15:31

DHs pension lost his entire previous years contributions (employee and employer) plus a bit more - and that's with the brakes being put on risk as he's considering retirement in the next 2 years - or was!

Original poster
talkingfarm · 01/02/2023 15:37

That's great- thanks for all your replies. No I've got a good few years to go until retirement.

Total waste of money though!! Especially as I'd raised my contributions to 8%. I could have really done with that money as cash in hand this year.

The company are actually not taking a fee as it didn't reach that level for them.

I've been really closely considering getting started in investments generally with vanguard- just to get something going- but having my money completely wiped out is not appealing.

OP posts:
lolstevelol · 01/02/2023 16:18

How old are you and how long until you want top retire ? Volatility is expected in the financial markets. Just remember that amount of shares you are buying are probably 20-30% below their peak value and shares tend to alway recover and usually fast.

If you do not mind me asking what funds are you invested in?

minipie · 01/02/2023 16:28

You know you haven’t actually lost that money right? Your pension fund used your money to buy shares which have a market value. Ok at the moment that value is less than the amount the pension fund bought them for, hence the “loss”. But you still have the shares and their value could well go up again in future and hopefully over the long term it will be far more than you paid in .

minipie · 01/02/2023 16:29

Apologies if you already know this it just wasn’t clear!

clarrylove · 01/02/2023 16:32

It's a good time to buy when share price is low, so try to look on the bright side that hopefully it will increase dramatically soon.

Fizbosshoes · 01/02/2023 16:33

bigbluebus · 01/02/2023 15:31

DHs pension lost his entire previous years contributions (employee and employer) plus a bit more - and that's with the brakes being put on risk as he's considering retirement in the next 2 years - or was!

DH is SE and pays into a private pension and it was down by around 6k but that didn't include what he paid in last year so it was more like down 8k.

DarkForces · 01/02/2023 16:38

@minipie has excellent advice. I've found my stocks and shares ISA bounces back pretty fast especially as they can buy cheap shares in this market. It may be worth adjusting your risk profile if you want a safer investment but then you won't make big gains either. I try to have a small risky find balanced with safer ones. Unfortunately stocks and shares are a gamble but over the long term I've decided it's worth it as interest rates are tiny but only you know your risk tolerance and what you can afford to risk

Original poster
talkingfarm · 01/02/2023 22:43

minipie · 01/02/2023 16:28

You know you haven’t actually lost that money right? Your pension fund used your money to buy shares which have a market value. Ok at the moment that value is less than the amount the pension fund bought them for, hence the “loss”. But you still have the shares and their value could well go up again in future and hopefully over the long term it will be far more than you paid in .

Ah ok thank you - I didn't actually know that. My mind is kind of frazzled now- as I'm not sure how much money I've actually paid in in total- compared to how much the fund is worth

OP posts:
wobytide · 01/02/2023 23:36

Is the "single company" St James Place or an affiliate?

minipie · 02/02/2023 00:47

as I'm not sure how much money I've actually paid in in total- compared to how much the fund is worth

Usually you can log in to your pension company’s website and they will have data on your total contributions to date (all money you’ve paid in) plus all employer contributions, as well as the information about current fund value.

Also it should tell you where your money is invested. Ideally your money would be in several different funds investing in different countries and different sectors so your risk is spread. As pp say you might want to look at this. Your money may not be spread enough, or it may be invested in funds that are more volatile and high risk than you want (lower risk = lower chance of big increase in value but also lower chance of losses).

Bunnycat101 · 02/02/2023 07:53

A drop when you’re in the accumulation phase isn’t be necessarily a bad thing. You’re effectively buying stocks and shares on sale. Ironically my funds with the biggest losses were the ones with higher bonds - the stuff that is supposed to lower risk but also some emerging market funds due to Russia.

ModeWeasel · 02/02/2023 16:20

OP have a look at some good overview of investing - Pete Matthews Meaningful Miney has some great mini videos on YouTube which are a good starter.

check your risk tolerance and the type of shares/ funds you are invested in - do they match?

whattodo1975 · 02/02/2023 16:48

If you aren't close to retirement don't worry.

In fact if you have being in all during 2022 you will more likely benefit from this slump on the stocks value, as you will have been able to buy more units so therefore better when the price of these units picks up.

100% do not make any changes to what you are currently doing with your pension, keep paying in what you are paying in.

thetailorofgloucester · 02/02/2023 16:55

wobytide · 01/02/2023 23:36

Is the "single company" St James Place or an affiliate?

Be interested to know why you ask. I had a conversation with someone who has turned out to be an affiliate of St James' Place

Fingerlessmitts · 02/02/2023 17:47

It is a big loss not sure who you are with or what the reason for the huge loss is, can you share what kind of fund you are in.

Beenaboutabit · 04/02/2023 10:10

I feel your pain - every investor lost money last year. It's also a natural reaction to be pissed off about it. My pensions were down last year and dropped to 80k down at the worst point (that mini budget fiasco), but they are slowly coming back and there was quite a jump in the last couple of days. I've been investing since 2007 and have seen lots of drops on the way. It's tough at the beginning to see a big drop because we've all worked hard for pension savings and it's money we could have had for other things.

There are a variety of possible coping strategies, but you could consider that you're still quids in.

For every £100 that is added to your pension, £43 comes from your employer, £46 comes from your pay that you would have had and £11 comes as a tax rebate.

If that £100 didn't go into your pension, you'd only have £46 extra to spend.

So, although you can see a 25% drop in your pension pot, you've actually still got a lot more in there than you would have had in your bank to spend. You're still quids in.

When stock markets drop, the best thing you can do is continue to buy so that you can get bigger gains on the way back up. This is known as pound cost averaging. So, continuing to pay into your pension as your portfolio value drops will work out better in the end.

My dad once said to me, if you don't like seeing your portfolio drop, stop looking. Easier said than done, but it will go down and it will go up. No one knows when, so the best thing you can do is keep investing, keep taking the money from your employer and the tax rebate, and try not to look.