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Maybe start with the gov free service:
https://moneyandpensionsservice.org.uk/
Think I've just wasted about 20years of paying in to one. All my own fault but I have paid into a private one for about 20 years and I just kept paying it without knowing what it was worth. Had no statement for years.
Because money is getting very tight I thought I better try and investigate who and where I'm paying this money. Long story short we moved years ago and that's why I've had no statements through as I didn't make them aware. Anyhoo after sorting all this out I found out that it's worth 2k more than what I've paid in. It was 4k more 3 months ago.
I would of been better off shoving the money under a mattress a reckon. This company from what I gather only does a pay out. They do not pay you monthly when you retire. So you get 25% tax free, I say oh ok what do you get taxed on the rest? About 40 to 50%!!!!!.
She did say you can claim some of that back off HMRC . Even so I'm sure I would gain more if I just saved the money.
So question is is there a better place to move it to? Apparently it's free to transfer it.
Maybe start with the gov free service:
https://moneyandpensionsservice.org.uk/
Seems like a typical private scheme where you can either buy an annuity or go into drawdown. But I'd take it to an IFA for advice and to make sure you've been getting the right amount of tax benefits.Originally Posted by sprite1275
If it is worth only £2k more than you've paid in over 20 years something is wrong - maybe there are crazy high fees?
God knows all I know it's in a high risk account that's why it's lost 2k in 3 months.
Think you need to do some more research and come back here when you have some details.
Which company is it with?
Where is it invested?
How much have you paid in?
Pensions are not a waste of time but if you are paying money into one, you need a basic understanding of what you are paying for.
As a self employed sole trader for 30 years I paid into a private pension for 26 of those years. When I worked out what I had paid in which was somewhere in the region of £88,000 it was showing it was worth £148,000.
It’s in a drawdown now to pay for our holidays etc over the next decade or so
I have done this recently with 2 old pensions. You need to know what funds you're invested in and the fees of the funds and platform and their performance for that period - that way you can compare to a new provider. I discovered that with Aviva i was paying 1.5% fees - that's too high and moved it to Vanguard, now paying around 0.5% with better fund performance. It doesn't sound much but over decades its tens of thousands.
Unfortunately if you've been paying too high fees and the funds are under performing for years there is not much you can do about it now. Although markets have really tanked this year - i think i'm 15% down, but a good time to buy more units! If you manage yourself you are going to save money but there is some reading to do, sites like moneysavingexpert have an excellent pension forum discussion page.
As a general rule keep the fees low and be diversified fund wise. You can however do this cheaply on Vanguard with just one fund - something like LifeStrategy funds or FTSE Global All Cap. Does depend on the amounts involved though, as usual theres no simple answer without much more information. Not financial advice though!
Last edited by vulcangascompany; 11th March 2022 at 14:42.
Not financial advice obviously.
It probably isn't how many pension pots you have. From my own experience the bigger and more popular pension providers tend to be a good place to put your money into. They are probably popular because they are more trustworthy and have reasonable fees. Just under 2 years ago I consolidated my pension pots into 2; work and private. They've been doing quite well overall if we ignore the last 3 months.
While the market is down it might be a good time to move to a more trustworthy provider. Just make sure you read the fine print before you settle on one. Once you open the new one, you should be able to request to transfer your old pension through them. Some providers even give you cash back when you transfer.
As soon as the SIPP's came out I transferred all my private pensions in and started investing for myself - did far better than most of those old poorly performing expensive schemes.
Cheers,
Neil.
Given markets these last few months, that sounds like a tremendous result. Wish that was all mine was down. A high risk strategy could see you down 40%+ if in the wrong investments/funds.
You have no idea if a £2k loss is good or bad, as you don't know what percentage it is of his overall investment. Mines gone down £50k and I think that is OK.
Well that sounds brilliant. Who's that with if you don't mind me asking?
Ok so I think it's changed hands a few times but it's with link fund. I'm sure it's in future world global developed index.
Is it? I'd expect that sort of return TBH.
Yes it is. it sounds a lot better than mine. I'm a very average Jo and any gains like that sound great to me.
The U.K. pension is scandalous. If we’d no pension scheme and this scam was put before us we’d tell them to f6ck right of.
Pay for over 45 years and only get 30 year contributions! The same as someone who’s never done a days work on their life. How can that be right! And they carry on getting benefits!!
Daylight robbery.
Think that's only return of ~2%/annum above inflation. Sure some finance expert could give an accurate figure.
Fag packet calculation shows it's 3.65% pa compound. Don't think that's great. Cant remember the details but I had a pretty poor return on a "with profit" regular savings product. Always regretted it and annoyed I let some w*nker talk me into it!
I think you've been had there, I'm afraid. Obviously you don't give the gross figures but even if you put in £2k now worth 4k, that's not great performance.
I'd certainly be considering complaining:
https://www.financial-ombudsman.org....ow-to-complain
AEGON
As I said it’s now on drawdown invested in Pathway 3 low risk, over the last 3 months it’s lost about a grand which in today’s market I can live with.
So what ever I've put in you reckon it should of at least doubled? When I first took this out it was through nationwide but I doubt that has any relivance. I might just follow your link after talking to them again.
I'd certainly be asking the question. If you put in £100 a year for 20 years, an annual return of 6.2% would have given you £4,000. So that's your doubling.
Obviously, if that £2,000 profit was on a larger amount, the % return is less. So £200 a year (£4,000) giving you a £2,000 gain is only an annual return of 3.7%.
Nobody can say it should have doubled, nobody knows how much you’ve paid in, for how long and into which company’s funds.
There is no point in going to the ombudsman as you don’t know what you are complaining about other than a low rate of return and that is wholly dependant on what funds you have invested in.
I have a draw down pension with Aegeon also. I consolidated a few poorly performing pensions a few years ago with them, the transfer values came to about 70k. Within a fairly short time the fund rose to 92k then fell back to 63k at the start of covid, which was a tad alarming!
Since then it got back to 90k and today is showing 88k. With all that is going on at the moment I'm pretty pleased with that.
I'll be starting to draw from it in the new financial year, a fixed monthly sum until its gone.
I remember starting off at £50 a month I think. Since then it goes up every year. I'm currently paying just over £100 a month and so far I've paid in 20k.
There's a lot of good material on Youtube about pension planning. The things to consider are how much you'll need (monthly) when you retire and what size pot do you need to achieve this.
The general consensus seems to be that funds should generate approx. 4% growth taking inflation into account. If you wanted £20k per year and factoring in the state pension, you'll need a pot of around £280k to generate the £11k shortfall between target & state.
Quite sobering really.
I'd read 7% after inflation and fees based on 10% stock market average returns each year. Obviously that's tricky currently as real inflation is currently probably 10% but I'd be livid if I only got 4% real return on my index trackers
I think a lot of 'advice' that's out there is pretty conservative! Still looking at £150k pot to realise £11k PA on 7%; this seems be far in excess of the UK average.
Agree - I think a lot of folks are in for an unpleasant shock when they get close to what they think is retirement and then do the maths
All about timing too, especially if you were planning to buy an annuity.
I've got a medium to high risk Aegon pot that I don't contribute to (which makes it easier to calculate the growth).
Over the last 12 years, it's yearly growth has swung between -15% (2021-2022) to +36% (2016-2017).
The average would have been 5.7% PA to Feb 21, until you factor in the current climate, which makes it more like 3.9%
It’s a State Pension scheme.
Everyone pays in so everyone can get something out.
It’s about the common good.
Think of others, not yourself.
Last edited by watchlovr; 13th March 2022 at 11:12.
I completely agree with you, thankfully I started looking into this a few years and realised that I needed to be saving much more each month. This gives me 15 years to turn it around, its tight but doable. It's sobering how much you actually need saved even for a modest retirement and how early you should start on this process. They have to teach this in schools, i can't remember receiving any financial education. If you start early much of the heavy lifting in the pot is done through compounding, leave it later and you have to contribute ALOT more.
I opened SIPPs for both of my children when they were born & have been paying £84 per month into each ever since. That figure because that's what we used to receive in family allowance or whatever they call it. My daughter is 20 at the end of this month & has about £60k in her SIPP. Not that she's ever thanked me for it :-)
That's amazing. That will probably double in real terms every 12 years or so and if she paid nothing in that should be worth around £1m in today's money by the time she is 67
Great idea - good planning, she may not thank you now but she will in 40 years time i'll be sure!
Nice idea.
I know not everyone has the spare funds to do so, and I can understand prioritising other funding - education, house deposit etc. - that may benefit kids earlier in life, when they may arguably need it more urgently, before contributing to a pension, but as a smaller part of a comprehensive strategy I still think it’s a good move if feasible.
It will give a very significant leg-up when starting a pension pot, and allows compound interest - the ‘eighth wonder of the world’ - to do most of the heavy lifting.
In terms of the (flawed, but understandable) argument re having more pressing needs when young than contributing to a pension, I think it also assists with that - with the pot already started they can prioritise their spending when young on essential needs other then a pension but still have the luxury of a pension pot that’s already established.
I also look at it like this, as a parent (and assuming I’m lucky to live long enough and maintain decent income): I’ll be there to help with education & house when they’re young; when I croak it my inheritance will hopefully be there to help them in middle age; the pension head-start is my way of trying to look after my child 50-60 years from now when I’m long, long shuffled off the mortal coil.
I started a pension for my youngest son when he was 19 as he was at University and will continue paying £100pm until he gets a job ( I’ve encouraged him to take an interest in how it is invested).Eldest son who is 25 was lucky to have a very well paid job for a few years and I encouraged him to save rather than spend. He has £200k in a pension and £200k in other investments.
It’s not just the amount you put in.
Beware that many company pensions have a default fund choice (ie if you don’t actively select from a range of funds that may be offered to you) which is very conservative and low risk. That might not be what you want/expect depending on your age and circumstances, so worth keeping on top of.
If you have paid in £20k over 20 years and have a fund worth £22k then I would certainly want an explanation. That's an annual rate of return of about 1.4% which is very poor.
There may be a valid explanation, like they put your funds on deposit in the absence of an investment direction from you. Do ask them though.
I've done exactly the same for my kids, saved their family allowance since they were born. Figures are similar and it's a good start for their own savings.
I've got 2 kids. What's family allowance?????
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Child benefit
https://www.gov.uk/child-benefit/what-youll-get
To be honest it was sarcasm, I've never seen a penny of family allowance or any other benefit, except the gift of giving a portion of my salary every month
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I suspect many people on here won't qualify for it tbh
That’s why I said used to receive. I ‘voluntarily’ decline it to avoid the full amount being paid back to HMRC on my tax return. It was £84 a month before that came into force. Since we didn’t need it I thought it’d be nice to consider it a government-funded SIPP for my first child. It is a nice figure because, even now, the taxman adds 20% to each payment, which is £100 in total into each of their pots per month.
It’ll be a nice 99th birthday present for me ;-)
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