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Mine has lost approximately 30% in the last 2 years . I am due to retire in 2 months but I think I will leave it in and wait for some kind of recovery . How are you all getting on ?
Same but many years left. I'd leave it in.
In 4 years up approx 12% (at highest) back down 6% present so with inflation I think I am no better off than when I started (on lower risk rating)
About 17% down from its peak.
Took a battering from Truss
I’m supposed to be taking 25% in 22 months so that Mrs ColP can retire
Was scared to look given how things are going. Down almost 10% so far this year but that’s on the back of +35% the year before and +80% over last 5 years so can’t complain. I am in a high risk/ mainly North American fund though.
I am already taking my main pension.
I have some other ISAs the majority now being in Fundsmith. I've been in since the start. A/c number in the 300s. Roughly flat the last two years. But overall average growth of 460% since 2010. Far better than cash over the long term.
https://www.fundsmith.co.uk/factsheet/
Needless to say my other ISAs have done less well but spreading risk means accepting varying returns.
Im down around 20% got 5 to 10 years tp go so not too concerned but in values its kinda upsetting.
Japan took biggest hit, followed by emerging markets. Vanguard LS funds faired better with the European equity loosing the least.
Got 5 pension companies with 2 or 3 funds in each so fairly diverse. 3 drip fed, 1 x work, 2 x dormant which i will uplift to Vanguard soon
I'm down about 18% on investment growth, basically taking me back to April 2021.
It would have been worse if I had not shuffled and spread my funds around early in 2020. The original fund I had 100% in is down 34%....
Not looked at pension recently but Vanguard ISA down 15%. Toying with idea of paying into a cash ISA instead of stocks and shares one whilst things are so volatile. But I'm sure the sensible thing is to continue monthly payment into the S&S to hopefully benefit from future gains. Hard though seeing my hard earned disappear down the plughole.
😩
Diverse bond funds, equity funds, and modest cash. Had some in property funds but that is minimal now - because of fund changing mostly rather than losses.
Took professional advice the other year and consolidated previous SIPPs and one (underperforming) trustee pension fund into an account on Fidelity’s platform.
Great timing! Of the diverse funds only the US index funds look anything like OK. Seems my gross return is -15%. Could be worse!
I don’t mind the fees for advisers and not even for the fund managers, but how they’re formulated is casino-like: we’ll take a % of the capital rather than of the gain. Fund managers 🤣 in the long term no one beats the market.
Still contributing to an employer SIPP which is separate. Fund choice very limited but recently shifted future contributions previously headed for ‘cash’ into an index fund and a bond fund.
Retirement? Depends how long I want to live affluently/comfortably/cheaply after I retire. Shouldn’t be too bad. Plus my SO retired early beginning of this year on a DB pension. I could retire next year I suppose but will likely carry on for 3-5 years as work is fun.
I’m supposed to be taking 25% in 22 months so that Mrs ColP can retire
For DC pensions that then lowers the annual limit for your future contributions? Or have you already stopped paying in?
Taking tax free cash only doesn’t trigger the money purchase annual allowance (MPAA).
Taking tax free cash only doesn’t trigger the money purchase annual allowance (MPAA).
Thank you. 🤔 seems like some potentially useful tax avoidance there.
I don’t mind the fees for advisers and not even for the fund managers, but how they’re formulated is casino-like: we’ll take a % of the capital rather than of the gain.
I agree. It's always seemed odd they are not charging based on performance.
If fund managers charged on absolute performance, they wouldn't get paid in years like this, and if they charged on performance relative to the market it would be 50/50 whether they get paid the rest of the time!
Toying with idea of paying into a cash ISA instead of stocks and shares one whilst things are so volatile
Don’t think that’ll help too much unless you can credit a large amount from the start. I opened one of those Newcastle Building Society 4.1% ISA last month, and they’ve just informed me that they’ve closed it to additional funds - it’s been open for paying in for 3 weeks and now my money is locked in for 2 years. I’m going to complain that they didn’t give me advanced notice so I could have move more funds in before the deadline.
I just had a look at the Coventry BS version and that has a warning about that on the front page of the ISA.
Perhaps it’s my fault, I thought I could carry on paying in over the term, but no I had an unforeseen 3 week window.
But also, if they were paid on performance, it would encourage short-term risk-taking to give them a chance of a massive payout regardless of the risk of a future collapse. Not quite what you want in a pension....
Yup, made mistake of looking at my SIPP valuation this week. I’m at least 10 years off though and have seen it all before. If I was looking to retire in the next few years it’d be a different story.
I'm looking to cash in my dB scheme in 5 years so have been tracking the CETV closely. As of this week its CETV is down approx 65%. Might need to rethink that strategy now.
ISAs? Only ever seen their use for cash that you have in excess of the tax free pension savings allowance. Hasn’t been much of a problem here.
Plus the pathetic interest rates have usually meant tax relief on not much amounting to not much.
I don’t mind the fees for advisers and not even for the fund managers,
I absolutely do and they eat massively into your gains. My strategy is low cost trackers which should charge around 0.25% per year. For novice investors the Vanguard Lifestrategy fund is a good start but has been coming under pressure lately due to drops in both equities and bonds.
Value wise mines is wobbling about but still with its head above the water. More to do with my AVC's and dropping my bonus into it. Hoping that I'm buying low though and will benefit somewhere down the road, my 5-10 yrs has moved to at least 7 now I think.
I do have a smallish final salary pension starting next year, I was amazed to find that I could start taking it at 50. Cash sum will pay off the little bit of mortgage I have left and start a S&S ISA, though I'm questioning if this is the right place to put it. This has been a plan for a while, to periodically sell my work shares and reinvest in an ISA. There is some grim reading out there with people's shares investments tanking. Maybe buying a few motorbikes might be a better idea.
For those that are nearing retirement, does your pension not move your pot over too a lower risk fund as you approach your retirement age? Ours does and I thought this would have been a universal practice. Unfortunately one guy from work has seen his pot reduce then has started to move it over to the low risk fund.
Mine has lost approximately 30% in the last 2 years . I am due to retire in 2 months but I think I will leave it in and wait for some kind of recovery . How are you all getting on ?
a better way of thinking about this would be what is the growth over the lifetime of the pension. Might make you feel a bit better.
Don’t forget dividends https://www.gov.uk/tax-on-dividends
And income from isas
if you take your pension early then the annual amount will reduce, also you can take the 25% tax free each year.
If you’re over 50 I’d recommend pensionwise (free, impartial but just 1 hr so get your ducks, questions, full facts and all current pension details all in a row before going)
Taking tax free cash only doesn’t trigger the money purchase annual allowance (MPAA).
But in this case only if he bought an annuity, which he may not want to do.
The pension I am currently paying into is 1% down overall, which is OK.
I'm currently focussed on chucking as much into it each month as possible to take advantage of the rock bottom* prices.
Question: am I right in thinking that maxing my monthly pension contributions towards the £3,333 limit, and using some savings to live on just now is the tax efficient way to go? Obviously I have the problem highlighted above that taking that money out aged 55 would restrict future contributions. But given that it's tax free, and my employer also pops the ( incorrectly calculated, but never mind) NI on top, it seems too good to be true.
Eg, I do a £1,500 contribution. The employer adds £207 onto that. So I get £1707 in my pension rather than £900 ( 1500 x .6 ) in my wage.
What have I missed?
* obviously they may not be rock bottom yet 🙂
Taking your 25% tax free cash doesn’t trigger the MPAA.
You can still use the remainder for flexi access drawdown at a later date. The MPAA comes into effect when taxable income is drawn.
No compulsion to take an annuity.
if you take your pension early then the annual amount will reduce, also you can take the 25% tax free each year.
Towzer, can you give a bit more info/ context on this. Thanks
Apologies, deleted the bit on MPAA for now, as I don't want to clog the thread with wrong info. Looks like the top hit on Google is talking bollocks on this!
Royal London have some good technical pages, if you want to read up on it
I’m looking to cash in my dB scheme in 5 years so have been tracking the CETV closely. As of this week its CETV is down approx 65%. Might need to rethink that strategy now.
I'll be not cashing-in ANY of my DB', they've all inflation-proofing as one of the 'benefits' and the oldest one has an 'inflation + 5%' annual increase.
TBH I've not looked at my private ones, pretty much know they've all taken a hit.
*I am not a financial expert, but then I’m not on commission either………
See pension wise, they are pension experts.
25% of your pension pot can be taken tax free. You can take this all in one as a tax free lump sum, I didn’t do that, each year I take £x from my pension pot of which 75% of x is treated as income and taxed per normal and 25% of x is tax free (so is not taxed), search for ufplus
So once a year I have to answer about 30 questions to confirm I know what I’m doing and absolve my pension pot holder, then I fill in a form with the details of the withdrawal, so not too complicated. Note that not all pension pot holders support ufplus.
Ouch. Just had a look.
Down nearly 14% in 12 months (half of that after some event in September...). Up a total of about 6% over last five years.
Just as well I'm not planning on retiring soon 😂
I feel for anyone who has been moving to a supposedly 'safer' higher bonds/gilts component moving to retirement as they have been hammered!
Cheers towzer. Agreed. I thought that's what you meant, but wanted to check.
Ouch. Just had a look.
Ok so I played the game also. My Vanguard SIPP/ISA savings are on average 3.5% down, and my HL SIPP of which the majority is in a Bailee Gifford fund is down 28% of its highest point, however it is at 22% growth to date. I do have 10 years until I want to retire and 17 until age 67 though so some time to recover, and am making monthly contributions to the Vanguard SIPP, therefore currently buying relatively cheap.
In addition I've maximised my employer pension to which the overall contribution via salary sacrifice is now at 12% of my base salary.
I do wonder whether now is the right time to consolidate the higher cost HL SIPP into the Vanguard one as I'd be buying the Vanguard stock relatively low, but moving that money around / having all eggs in one basket feels risky to me.
Can anyone suggest a stocks and shares ISA should I go down that route? My idea was a regular monthly deposit along with less regular higher value deposits(cashing in employer shares and dividends). I was thinking of investing the majority in a fund whilst having a dabble on some shares with the smaller proportion. I doubt I'd be doing that many transactions (shares) over the course of a year. I already as mentioned contribute AVC's into my company pension and saw this as another basket to save with.
AJBell is reasonable.
I’d be going with Vanguard or Fidelity or similar for super low fees if you want ease of use / minimum interaction. There are others which lets you dabble a bit more.
Many thanks, AJBell came up as a recommendation on one of the Money sites and Vanguard I've heard of. Will do some research.
@YoKaiser I am working through a massive series of podcasts/vlogs called "Meaningful Money". There is some great information available and it is all online for free
Here is a link to the Episode where the founder Pete Matthews discusses how to chose a multi-Asset fund to invest in. There are no recommendations (that would get him in to trouble), but there are great pointers on how to make a shortlist of funds and then how to compare those funds.
TLDR? A lot of his followers invest in one of the Vanguard LifeStrategy funds. That's what I have just done.
That's exactly what I've been doing for the last few years.
You can actually exceed that as well to use the last few years allowance as well.
I do a £1,500 contribution. The employer adds £207 onto that. So I get £1707 in my pension rather than £900 ( 1500 x .6 ) in my wage. What have I missed?
You've avoided tax now, but you'll pay it when you take the pension. The benefit comes if your marginal rate is lower, which is often the case as your total income is usually lower than your working income. For example, you've avoided paying 40%, but you will probably pay 20%. In my case, I have a SIPP, an index-linked DB pension and state pension. Fiscal drag (the 40% limit is frozen while my pensions increase by inflation or whatever next week's PM think) will reduce the amount I can pay myself each year from the SIPP at 20%, probably to zero before I've taken it all. So I'm taking as much money out of the SIPP via UPFLS each year as I can, while staying in the 20% band, then putting it in my ISA (probably in the same investment funds) - it's then mine to spend as and when I need it. I could leave it in the SIPP, and if I die before I'm 75 my wife gets it tax free, but if I die after I'm 75 she pays tax on it, probably at 40% as it will all be in the same year.
Thanks MadBillMcMad
To save the uninitiated like me, the effort of googling:
What is an UFPLS? Uncrystallised funds pension lump sums (UFPLS) are a way of taking pension benefits from money purchase pensions without going into drawdown or buying a lifetime annuity. Under the UFPLS option, an individual can take their uncrystallised pension funds in one go, or as a series of lump sums
Thanks greybeard. Gonna need a while to digest that.
Am I right in assuming you're over 55?
Also, why upfls rather than just drawdown? ( are they bigger?)
Found it:
https://thepeoplespension.co.uk/help/knowledgebase/differences-flexi-access-drawdown-ufpls/
Am I right in assuming you’re over 55?
Also, why upfls rather than just drawdown? ( are they bigger?)
Yes, now getting state pension.
The reasons for going for UPFLS or FAD depend on circumstances. In my case, I wanted to pay out enough from the SIPP to get me as close to the 40% threshold as possible, and once I had the payout I would put it my ISA. But you can only put so much a year in an ISA, and I also had cash (from a legacy) sitting in a Building Society where I'd be taxed on the interest* so wanted to shift to the ISA. So getting all my tax free 25 % at the start would have meant putting it somewhere, leaving it in the SIPP was more efficient.
* although when interest rates went very low and the £1000 tax free interest allowance came in it didn't make much difference in the end.
Lordy, I need to Google a few of the TLAs used.
Regards the comments along the lines of 'my pot is down 20%, glad I'm not retiring tomorrow'
I've probably got this all wrong. I can see that if you went old school for an annuity that would be very bad.
If you go for income drawdown then as I see it, yes you have less today but you might have more tomorrow. Yes it would obviously affect the initial lump sum available.
Am I misunderstanding the system. I suspect so
My horror story is I haven't got one...
That's a lie I do but it's woeful.
I'm relying on the fact no kids and a couple of bits of property... I'm gonna sell up buy a motorhome drive around till money runs out And 💥 boom!
can see that if you went old school for an annuity that would be very bad.
If you go for income drawdown then as I see it, yes you have less today but you might have more tomorrow.
Yep, I was going to say the same, that für drawdown you don't have anything like the same cliff edge effect as the conversion date approaches.
But then I recalled that annuity rates had soared to 7.5% recently and so the " annuities are a waste of time these days" truishm may no longer apply.
Good timing for this post. I am considering opening a self-funded pension, i.e the max I can pay in is £2880 a year under current regulations. I have little idea what I am doing, but given the government add 25% onto my pay-ins every year, even if the pension fund underperforms somewhat I am still making (hopefully) a decent amount with the government mark up? Is this correct or am I talking rubbish?
Apart from that I am buying Bitcoin, Tesla stock and opening a 1 year bank savings bond at about 4.5% APY.
The annual allowance is currently £40,000 for most people.
However, you can also only receive tax relief up to 100% of your earnings.
So if your earnings are lower than £40,000 you'll be entitled to tax relief only up to the amount you earn. If you earn less than £3,600, you can pay in up to £2,880 and still get tax relief.
The annual allowance is currently £40,000 for most people
plus you can also use any unused allowance from the last 3 years
Pensions can be a bit of an exercise in positive thinking at the Mo. I’m a financial moron, so I try hard to keep things simple.
Like many folks, the past few months have been shockingly terrible. But then again, the past few years seem to have generally seen pretty good returns.
Anyway, what I wanted to say was that, providing you’re not looking to retire right now, I’m hopeful that now is a good time to be paying into a pension - since the shares the funds are buying should be quite good value for money at the Mo. So hopefully that will pay off in the next few years when (hopefully) share prices recover.
(Apologies to the financially educated among you who may find my simplistic approach too ignorant).
Pensions can be a bit of an exercise in positive thinking at the Mo
They’re a long term thing. Well, unless you’re in what appears to be the late middle aged IT singletrack demographic in which case it’s all looming fairly close!
In the long term a passive tracker index-based equity investment will work out. Especially with the generous tax relief the U.K. government affords many of us.
I’m reminded of sharesave schemes back in the day: the shares had to lose 40% to break even on the deal.
unused allowance
as before, unless it’s for fast access or ‘rainy day’ any thought of putting money into savings other than a pension if there’s any allowance left seems…suboptimal.
Apart from that I am buying Bitcoin, Tesla stock and opening a 1 year bank savings bond at about 4.5% APY.
Why are you buying Tesla stock out of interest?
..as I think it will go up considerably in the longer term, and I generally prefer disprutive investments.
Good timing for this post. I am considering opening a self-funded pension, i.e the max I can pay in is £2880 a year under current regulations. I have little idea what I am doing, but given the government add 25% onto my pay-ins every year, even if the pension fund underperforms somewhat I am still making (hopefully) a decent amount with the government mark up? Is this correct or am I talking rubbish?
Apart from that I am buying Bitcoin, Tesla stock and opening a 1 year bank savings bond at about 4.5% APY
25% return immediately on standard rate income tax if you pay in to a pension and you’re putting money in a 4.5% bond from net income?
Bitcoin? You’re trolling right?
Tesla stock? If you like a gamble…
Parrot
There is a max. I can pay into a pension so with some of the leftover yes I am putting some into bonds.
Tesla - yes it's a risk but based on my research I think a worthwhile one.
Bitcoin yes - why would I be trolling?
25% return immediately on standard rate income tax if you pay in to a pension
You only keep that 25% if you're not paying income tax when you draw the pension. You gain 6.25% because 25% of the pension is tax free though.
25% return immediately on standard rate income tax if you pay in to a pension
You only keep that 25% if you’re not paying income tax when you draw the pension. You gain 6.25% because 25% of the pension is tax free though.
But, if you have long enough to invest, you get to keep all of the additional earnings on the 25% which could be significant even after paying the tax when you cash it in.
If the timing suit, you can also retire a bit early and live off the £12K free per annum that most people are eligible for.
you get to keep all of the additional earnings on the 25%
Since you get taxed on the increase when you pay it out, you are no better off than if it was in an ISA.
live off the £12K free per annum
Agreed - that's where you gain. If your marginal income tax rate when you take the pension is lower than the tax you would have paid if you hadn't put it in the pension, you gain. Plus the 6.25% (12.5% if your marginal rate in retirement is 40%) because 25% is tax free. In return for that gain you lock it up until you're 55. Not saying it's a bad idea, just that there's not necessarily quite the gain that people think.
Lost £80k in last few weeks, thanks Liz ☹️
Not retiring for another 10years so hopefully it will recover when the brexit boom finally hits and the uk prospers after ditching all the EU red tape. 😉
As a glass half full type person I’m thinking that considering the last 3 years or so my pensions haven’t done all that badly. Sitting about at zero return between mid 2019 and now, which considering everything seems not all that bad. Kwasi Kwarteng lost me about £30 grand in a day though….
As a glass half full type person
Same here.
I'm still at the level I was as 2020.
My money is going further currently in the number of stocks I am buying.
I'm in it for another 25-20 years.
I'm still 15 years from retirement so have stopped checking my pension as it's just depressing. There's a good argument for investing in property for part of your pension but then you end up making the housing crisis worse
I’m still 15 years from retirement so have stopped checking my pension as it’s just depressing.
Same here - i'm 50 in a few weeks so just leaving the pension to do its thing.
Currently i pay in 8% and the company matches it, not sure what else i should be doing.
Just changed next month's contribution to 40%!
Just hope I make it to 55
Received annual statement from Scottish widows today, down just 2.9% compared with 20% uplift last year.
putting money into savings other than a pension if there’s any allowance left seems…suboptimal.
Unless you're in danger of exceeding the lifetime allowance.
Eh?
That's what he said " if there's any allowance left"
Same here – i’m 50 in a few weeks so just leaving the pension to do its thing.
Currently i pay in 8% and the company matches it, not sure what else i should be doing.
Aye that, although ours puts in 12% for my 6
I'm not brave enough to move it, risk it etc, I think the fund now I've passed 50 is actually self moving towards safer options than I used to have. But mostly, I'm waiting it out.
FYI (*apologies)
Remember your pension is not part of your estate/will and you need to do an expression of wish for each pension.
https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems/pensions-after-death