Pension fund performance - do you monitor yours, how is it doing, do you actively change it?

Dealing with overvalued markets is so difficult. One has to think it will deflate eventually, but markets can stay overvalued for a long time (look at housing). Feels like the risk is the highest it's ever been right now.
 
Hedge said:
I have likely contributed to a few pensions over the years and some of them I have no idea what happened. Is there anywhere anyone recommends that can help me find them? Or do I just try to contact old employers from decades ago and ask if I'm in a system somewhere.
Click to expand...

Use this the pensions tracing service

www.gov.uk

Find pension contact details

Find the contact details for a pension provider by using the Pension Tracing Service
www.gov.uk www.gov.uk
 
Last edited:
danlightbulb said:
Dealing with overvalued markets is so difficult. One has to think it will deflate eventually, but markets can stay overvalued for a long time (look at housing). Feels like the risk is the highest it's ever been right now.
Click to expand...

This was what was behind my comment in regards people chasing returns.

You need to try to spot the ones you think are likely to rise in the future.
Yes you don't want to put into a silly mix, but there are plenty of funds that avoid that as well.
 
Mercenary Keyboard Warrior said:
This was what was behind my comment in regards people chasing returns.

You need to try to spot the ones you think are likely to rise in the future.
Yes you don't want to put into a silly mix, but there are plenty of funds that avoid that as well.
Click to expand...
I know this is a how long piece of string question. But its accepted, isn't it, that equities will rise given a long enough time frame.

Short term volatility aside, what would you expect the long term percentage gain of a global equity index fund to be, as an annual average? Is it 10%, less, more?

I would be very happy with 10% p.a gains on average for the next 20 years, then I could slowly transition to lower risk funds when I reach 60-65 (I expect to work until 70 at least, that is when my mortgage term ends). But is 10% p.a what would be expected from that type of fund?

I suppose another way of asking what Im asking is, what do I do to target 10% p.a average returns for 20 years?
 
Last edited:
Mercenary Keyboard Warrior said:
Yes you don't want to put into a silly mix, but there are plenty of funds that avoid that as well.
Click to expand...
Oh P.S - my partner showed me her DC pension fund. She has a similar fund to me where you can choose schemes. She had done so, and gone...wait for it...100% into a single property tracker fund.

Why did she do this I asked? She just thought property would always go up and didn't understand what anything else was.
 
danlightbulb said:
I know this is a how long piece of string question. But its accepted, isn't it, that equities will rise given a long enough time frame.

Short term volatility aside, what would you expect the long term percentage gain of a global equity index fund to be, as an annual average? Is it 10%, less, more?

I would be very happy with 10% p.a gains on average for the next 20 years, then I could slowly transition to lower risk funds when I reach 60-65 (I expect to work until 70 at least, that is when my mortgage term ends). But is 10% p.a what would be expected from that type of fund?

I suppose another way of asking what Im asking is, what do I do to target 10% p.a average returns for 20 years?
Click to expand...

But what 10%, 10% notional gain, 10% real terms (after inflation gain) etc

If inflation is high then 10% is probably a poor return after adjusting for risk.
(Its one of the main benefits of DB over DC in that DB to a better extent historically protected against inflation)

I am going from memory but I think high single digits was until recently tested as a good return.
You can achieve more, its just risk and return balancing.

I think if you are after 10% and low inflation over many years your into high risk.
 
Mercenary Keyboard Warrior said:
But what 10%, 10% notional gain, 10% real terms (after inflation gain) etc
Click to expand...

Not sure what those trustnet charts show - are they nominal or real?

Id be happy with 7% pa. With my contributions that gets me to a million quid pot over 25 years.

7% should be achievable, but a million quid pot sounds unlikely to me (I just find it unlikely that I would ever have this much money) If I live for 30 retirement years that will give me £33k a year which should be enough.
 
Last edited:
danlightbulb said:
I know this is a how long piece of string question. But its accepted, isn't it, that equities will rise given a long enough time frame.

Short term volatility aside, what would you expect the long term percentage gain of a global equity index fund to be, as an annual average? Is it 10%, less, more?

I would be very happy with 10% p.a gains on average for the next 20 years, then I could slowly transition to lower risk funds when I reach 60-65 (I expect to work until 70 at least, that is when my mortgage term ends). But is 10% p.a what would be expected from that type of fund?

I suppose another way of asking what Im asking is, what do I do to target 10% p.a average returns for 20 years?
Click to expand...
Your first point - yes - Equities will rise in general over a long time frame.

Second point - more "realistic" to think 6-7% PA.... No one should be unhappy with this plus compounding of fund/regular payments etc

10% over 20 years is possible, but you'd have to increase your risk /exposure to levels that most people aren't comfortable with.
 
danlightbulb said:
Not sure what those trustnet charts show - are they nominal or real?

Id be happy with 7% pa. With my contributions that gets me to a million quid pot over 25 years.

7% should be achievable, but a million quid pot sounds unlikely to me (I just find it unlikely that I would ever have this much money) If I live for 30 retirement years that will give me £33k a year which should be enough.
Click to expand...

£1M in 25 years is not bad at all
Your basically seeing the benefit of compounding

Many people start pumping their pots hard when they get to say 50s, pay off the mortgage, start talking of retiring early, but then they have maybe 15 years to go and need to think about derisking towards the end
It doesn't leave a lot of time for growth

Oh, I think those charts will be nominal (ie actual) you tend to look at investments that way, you tend to value the pension payment back into real terms
 
Same chart with CPI and RPI. Same timeframe.

3p06U9Th.png


U0r20nEh.png
 
Last edited:
200sols said:
Same chart with CPI and RPI. Same timeframe.

3p06U9Th.png


U0r20nEh.png
Click to expand...

Cool so after inflation the real growth is about 30%, half of the nominal growth.

6 year nominal growth around 10% a year though, so higher than the 'realistic' 6-7% referenced above.

Edit - your spoiler is 16% pa nominal growth, way higher than the realistic 6-7% target.
 
Last edited:
I opened a SIPP with HL at the end of 2018, consolidated a few old pensions into it and followed this guide to invest them in three index funds that together form a global index tracker with very low fees: https://ukpersonal.finance/diy-global-tracker/

Looking at the SIPP just now, it has gained 73.91% since December 2018 so that's 14.7% average annual growth. All with 0.43% annual charges.
 
danlightbulb said:
Edit - your spoiler is 16% pa nominal growth, way higher than the realistic 6-7% target.
Click to expand...
No, its a compounded annual return which is more like 11%. As I already said, it was a bull run and the conditions that allowed it i.e 0% interest rates and QE dont exist anymore, they are now the exact opposite.

The annual returns assume you are fully invested from day 1, that doesn't happen with pensions.
 
You must log in or register to reply here.
Back
Top Bottom