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

[Foghorn Leghorn]

Historically I think this was true, migrating to bonds as retirement neared, to guarantee an annuity income. Today, draw-downs with a cashpot, to whether the hiccups, might be a better option for most with the bonus that anything left in the pension pot can be passed on to family / friends.

Annuities are out of fashion to some extent, but my plan is to seriously consider chopping in part of my DC (i have a couple of small DBs) for an annuity that along with my DBs and state pension gets me somewhere close to my minimum required cash income.
That way I can leave the DC pot remains in higher risk rating higher growth funds and basically should anything bad happen stockwise i can be hands off until they recover.

Its all personal risk & rewards vs certainty type stuff you need to balance.

There's also the issue of managing the drawdown pot as you get further into retirement. For most of us it'll be fine in the earlier years but as we age our mental faculties will deteriorate to the point we wont be able/want to manage that pot.

I'll certainly be looking at tackling that issue as you've suggested @Mercenary Keyboard Warrior. Best of both worlds I think, an income paid directly each month with the remainder continuing to grow (hopefully) and being left to my beneficiaries when I kark it.

 

[slinxy]

Anyone with individual companies stocks in their pension pot needs their head examined. The whole idea that a different company manages your pension that differs from the company you work for is to stop the relying of the performance of a single company and stop people like maxwell from spending people’s pensions.

Sticking to market trackers is fine.. even the S&P 500 wasn’t that badly affected. But if you can’t handle dips, let someone else manage your pension for you.

 

[200sols]

Viability of an annuity will depend on the interest rates at the time you retire really, right now they look pretty attractive but from about 2009-2023 they were terrible.

Sticking to market trackers is fine.. even the S&P 500 wasn’t that badly affected. But if you can’t handle dips, let someone else manage your pension for you.

Eg post COVID markets fell like 20%. Thats massive in regards a drawdown designed to last into say 90s with expectations of x% per annum over the term.

IMO When people say a market dip they are just skewed by recent performanc thinking 'dips' only last a few months or a year, a large and prolonged market drawdown is moving away from many peoples memory, I bet most of us where not investing the last time it happened.
Look at the S&P500 from 2000-2012, it went nowhere at all. I'm not saying it will happen but it could...

Personally I think being 'all in' on US stocks at present valuations is pretty risky for those at retirement, even with a 1 or 2 year cash buffer.

 

[Kurgen]

1. No
2. I dont know
3. No

 

[Mercenary Keyboard Warrior]

There's also the issue of managing the drawdown pot as you get further into retirement. For most of us it'll be fine in the earlier years but as we age our mental faculties will deteriorate to the point we wont be able/want to manage that pot.

I'll certainly be looking at tackling that issue as you've suggested @Mercenary Keyboard Warrior. Best of both worlds I think, an income paid directly each month with the remainder continuing to grow (hopefully) and being left to my beneficiaries when I kark it.

Yes very true in regards management.
Also a risk of scamming remains whilst there is a "pot". When its an annuity there is no real benefit to go after it.
It just falls into the standard try to scam cash out of old people tactic thats as old as the hills.

Some years ago there was a point when you had to take an annuity. IIRC it was state retirement age + 10 years. (So was broadly 75 in articles)
But the gov scrapped it as part of messing with pensions.

 

[Mercenary Keyboard Warrior]

Viability of an annuity will depend on the interest rates at the time you retire really, right now they look pretty attractive but from about 2009-2023 they were terrible.




IMO When people say a market dip they are just skewed by recent performanc thinking 'dips' only last a few months or a year, a large and prolonged market drawdown is moving away from many peoples memory, I bet most of us where not investing the last time it happened.
Look at the S&P500 from 2000-2012, it went nowhere at all. I'm not saying it will happen but it could...

Personally I think being 'all in' on US stocks at present valuations is pretty risky for those at retirement, even with a 1 or 2 year cash buffer.

Yep agree.
The all in on S&P500 etc worries me when I see people going on about it.

Haven't mentioned exchange rate either which can dilute or enhance gains in foreign investment.
Maybe 1 or 2 isn't enough but I would do that as a minimum personally.
Although the exact "balance" for me depends on how long you could leave it to recover.
Like I said my personal feeling has been to weigh in a chunk and grab an annuity that takes me to roughly my basic requirement for cash income (to cover living expenses)
Which right now is probably an annuity for £7.5k annually or something. Thats to give me something like £2k a month (after tax) cash income.

The main thing for me is that I would derisk over time constantly, not the whole portfolio but a chunk. Especially if you see a peak in share prices.
S&P feels very heated right now.

There is a point when if you have a decent size pot crystalising a good chunk of that into "enough" makes a lot of sense. Always after more more more just leans towards sooner or later hitting a problem.

 

[slinxy]

Viability of an annuity will depend on the interest rates at the time you retire really, right now they look pretty attractive but from about 2009-2023 they were terrible.




IMO When people say a market dip they are just skewed by recent performanc thinking 'dips' only last a few months or a year, a large and prolonged market drawdown is moving away from many peoples memory, I bet most of us where not investing the last time it happened.
Look at the S&P500 from 2000-2012, it went nowhere at all. I'm not saying it will happen but it could...

Personally I think being 'all in' on US stocks at present valuations is pretty risky for those at retirement, even with a 1 or 2 year cash buffer.

Markets seems to recover a faster, the chances of another Great Depression is very unlikely. The internet bubble took about 10 years and the housing bubble took 5 years to recover. There are trading pauses to stop a run on the markets…

Not saying that it won’t happen, but I’m 15 years away from even thinking of retiring early and over two decades away from my official retirement date. With drawdowns likely be the main method that I use to claim my private pension, retirement doesn’t mean that I have to cash in all my shares.. there’s a good possibility that I will still be in the market 10 to 20 even 25 years after retiring.

Having said that my DC pensions is split 50/45/5 into a managed fund/developed world/emerging market. It’s my own personal isa that is split with over 50% (mainly due to performance) into the S&P. The rest is dev world, emerging market and uk REITs.

I do have DB pension pots and the managed fund has bonds within it, in case it really hits the fan.

 

[booyaka]

Some years ago there was a point when you had to take an annuity. IIRC it was state retirement age + 10 years. (So was broadly 75 in articles)
But the gov scrapped it as part of messing with pensions.

yes - used to be 75 you were forced to take annuity - was a dreadful time for people.

Also you used to be "limited" to how much of your drawdown pot you could take based on GAD rates (government actuarial department) - another farcical time...

Glad to see it's all gone now.

 

[platypus]

Annuities are out of fashion to some extent, but my plan is to seriously consider chopping in part of my DC (i have a couple of small DBs) for an annuity that along with my DBs and state pension gets me somewhere close to my minimum required cash income.
That way I can leave the DC pot remains in higher risk rating higher growth funds and basically should anything bad happen stockwise i can be hands off until they recover.

Its all personal risk & rewards vs certainty type stuff you need to balance.

I aim to buy an annuity with some of my final retirement pot, but definitely not all, and it will depend on whats on offer when I come to it - as you said they're out of fashion at the moment but who knows what the landscape will be like in 15-20-30 years time?

 

[booyaka]

I aim to buy an annuity with some of my final retirement pot, but definitely not all, and it will depend on whats on offer when I come to it - as you said they're out of fashion at the moment but who knows what the landscape will be like in 15-20-30 years time?

There are also a number of "hybrid" annuity / drawdown products out there that suit some people.

 

[Azza]

Vanguard say my transfer to Invest Engine has been complete. We'll see when it actually appears in my Invest Engine account

The cash appeared today, and placed the buy order.

Pretty quick process considering.

 

[bainbridge]

I've tracked down one of my pots from a previous employer and it's with Lifesight.

They charge £1500 to transfer out a pension!

This seems outrageous to move your own money.

I might ring them to complain, presumably pensions are FCA regulated and if Lifesight do stand their ground maybe the Ombudsman might agree with me.

 

[inferno]

I've tracked down one of my pots from a previous employer and it's with Lifesight.

They charge £1500 to transfer out a pension!

This seems outrageous to move your own money.

I might ring them to complain, presumably pensions are FCA regulated and if Lifesight do stand their ground maybe the Ombudsman might agree with me.

That’s unbelievable, i transfer my pension paid by my company out of Aviva into my SIPP with Fidelity for free every month.

 

[throwaway4372]

Oof, good luck

LifeSight GB - master trust pension scheme is rated "Bad" with 1.6 / 5 on Trustpilot

Do you agree with LifeSight GB - master trust pension scheme's TrustScore? Voice your opinion today and hear what 121 customers have already said.

uk.trustpilot.com

 

[bainbridge]

Oof, good luck

LifeSight GB - master trust pension scheme is rated "Bad" with 1.6 / 5 on Trustpilot

Do you agree with LifeSight GB - master trust pension scheme's TrustScore? Voice your opinion today and hear what 121 customers have already said.

uk.trustpilot.com

Quite a grim picture looking at those reviews

I'll speak to them next week to find out if I can get this reduced.

Part of me is considering staying with them and moving the fund to 100% equities, then transferring out when I'm 55 because apparently the transfer fee is now capped at 1% for ages 55 or over.

Having said that, their AMF is the highest of all my pots, so really I want to move away from Lifesight asap.

 

[bainbridge]

That’s unbelievable, i transfer my pension paid by my company out of Aviva into my SIPP with Fidelity for free every month.

Apparently all new pensions have to have nil transfer out fees at a 1% cap for old pensions if you're 55 or over.

This pot of mine is from 2004 and changed hands twice in the meantime.

 

[krooton]

Just revisited:
84% of portfolio - Blackrock Consensus 85 (+31%)
7% of portfolio - Vanguard LifeStrategy 80% Equity (+14%)
9% of portfolio - WS Lindsell Train UK Equity (+48%)

Averaging up +31% since starting in 2016, which has essentially matches inflation since then too (boooo!), but as work is matching my contributions, I'm still actually up pretty much 100%.

Almost a year later, I wanted to have a look since the markets are taking a hit with all the USA shenanigans.

84% of portfolio - Blackrock Consensus 85 (+42%)
8% of portfolio - Vanguard LifeStrategy 80% Equity (+25%)
8% of portfolio - WS Lindsell Train UK Equity (+64%)

 

[Zowghi]

Almost a year later, I wanted to have a look since the markets are taking a hit with all the USA shenanigans.

84% of portfolio - Blackrock Consensus 85 (+42%)
8% of portfolio - Vanguard LifeStrategy 80% Equity (+25%)
8% of portfolio - WS Lindsell Train UK Equity (+64%)

If that is roughly 10% from last year that's pretty good.

 

[tangey]

I switched my main DC pension from vanguard developed world ex-uk, into short term money market bonds, when the chinese AI thing made news. Didn't go back in, as I was waiting to see if Trump would do his Tariff thing. I'll leave it getting 4.5% whilst determining whether this is just a wobble or something more substantial. I'm too close to retirement to take a big hit on the valuation.

 

[krooton]

If that is roughly 10% from last year that's pretty good.

Yep, my total position since 2016 is now +42%, though technically higher due to match work contributions, like +181% vs what I actually put in.