Pension fund performance - do you monitor yours, how is it doing, do you actively change it?
- Thread starter danlightbulb
- Start date
Qualified Earnings for Employer Contributions are any earnings between £6,240 and £50,270 — so they essentially reduce the gross figure by £6,240 before calculating the 3% (up to £50,270). So for a £50k salary, QE becomes £43,760, and then 3% of that is £1,312.80.
I will double-check whether salary sacrifice affects the figure on which the QE is based, but I assume it will reduce it. So £50k less the Salary Sacrifice, less the £6,240 would = the £1,065.30 in the Scenario 2 table.
I've found the figure £6240 as the threshold for mandatory contribution in a workplace pension. So your company are contributing the bare minimum they can do to comply with the government rules.
That's harsh.
That's harsh.
Last edited:
Soldato
I contribute 7% at present, and my company matches upto 6%, so currently 13%. 401k though, so not a pension).
I didn't start this till a few years ago now and I am now in my mid forties, so not a great position. I only have about 2/3s of my salary in there as of right now.
I should still have a pension in the UK from government work of 7 years, so will need to look at that when I do retire eventually.
When my house sells and we move, I will also be looking at increasing contributions for my 401k, and also at other investments, as I really want to improve my future financial outlook.
I didn't start this till a few years ago now and I am now in my mid forties, so not a great position. I only have about 2/3s of my salary in there as of right now.
I should still have a pension in the UK from government work of 7 years, so will need to look at that when I do retire eventually.
When my house sells and we move, I will also be looking at increasing contributions for my 401k, and also at other investments, as I really want to improve my future financial outlook.
Yeah, that's it.
It's a small business so doing the minimum required. It's still better than no employer contributions, which is what I was getting before the Workplace scheme was introduced.
I get benefits elsewhere, so can't complain.
Rarely do you find people paying what they should, they tend to pay what they can afford most times.
But then people are happy to pay £60 a month for a new iphone, £80 a month for a gym they haven't been to in years, £100 a month to sky etc..
Associate
- Joined
- 30 Apr 2018
- Posts
- 52
I find Aviva's calculator pretty decent, as it shows annuity, drawdown and if you took the whole pot at maturity in a simple interface: https://www.direct.aviva.co.uk/myfuture/RetirementPlanner/AboutYou#assumptions
Soldato
I'm curious if folk still opt for an annuity versus a drawdown, which seems to be a better method for a) ensuring maximum investment returns (assuming no catastrophic banking crashes), b) allowing money to be pulled as required and potentially better management of tax arrangements and c) ensuring all pension investments are accessible via beneficiary and retained within the estate after death.
Soldato
I had a look at mine today, still disappointing how little is in there and how much it is projected to be when I retire! Had a sniff around the funds (it’s managed by legal and general) there seem to be about 28 different funds it could be in but the whole lot has been in a new fund called ‘growth’ for the last which is only a year old so hard to compare over the longer term with the other funds, it is equity based and mostly US which seems sensible although I am tempted to diversify it and split between two similarly performing pots to hopefully a get a better long term average! The web portal seems intended to make it deliberately difficult to see how your money has been performing!
Soldato
- Joined
- 13 Sep 2005
- Posts
- 4,346
My company had some independent pension advice company in recently and it looks like they have advised to switch over the default fund to one with some kind of ESG rating. It's up to us whether we go with it but expect there's something in there that's not in our best interests like higher fees or similar. Will find it soon.
Last edited:
Associate
- Joined
- 30 Apr 2018
- Posts
- 52
My company do a similar thing, they put it in a target retirement dated fund, which you cannot view performance before you invested into it - which I've been in for 3 years, its done "ok" gaining 5.5% each of those 3 years but I took half of it and moved it into a US Equity fund which has been performing circa 20% for the past few years, I'm tempted to move it all out of the dated fund. makes me a little annoyed that I have potentially missed out on circa 15% a year for the past 3 years!
Associate
- Joined
- 3 Oct 2012
- Posts
- 409
My funds have averaged over 10 per cent per annum over the last 10 years. I track their performance every month and I only invest in global equity trackers. The default lifestyle fund is basically a tax on stupid people.
Soldato
Is "default lifestyle" in reference to the Vanguard Lifestrategy tracker or something different? I significantly reduced funds in LS and moved this over to SP500 (VUAG). Pensions are split between VWRP and VDWXEIA; I appreciate the significant overlap between the 2 but hedging my bets the UK will continue to perform poorly over the next decade or so.
A bit harsh.
A tax on people who aren't saavy in finance.
It is hard. I consider myself way above average and it's quite confusing.
(the average bar is low)
Wish we could have a poll on "what vanguard funds are you in? "
I'm switching to vanguard this month. I have 5-6 individual pots in whatever they have always been in.
Time to start consolidating.
Last edited:
Soldato
Have a look at my post history in this thread if you want to consolidate into a low fee global tracker structure based on Vanguard funds.
Last edited:
Sounds like a lot of work for future.
I've noted down a few as I've followed the thread. And done a bit of reading. As gets closer to April I'll do a bit more research
Associate
- Joined
- 3 Oct 2012
- Posts
- 409
I use Vanguard for my ISA not pension. The occupational DC schemes I'm in offer the usual BlackRock, L&G, Mercer's own etc...
Soldato
They'll 'lifestyle' you into more and more bonds as you get older and you'll miss out on a lot of growth IMO.
Last edited: