Average pension pot growth
Discussion
Depends what it's invested in, but I'm normally conservative to avoid disappointment.
If it's in equities then it might be best to use both good eg. 8% and bad eg. -8% scenarios to illustrate the risk over the short term before you start drawing on it.
Personally, I tend to leave inflation out of it and just show performance above or below inflation. It's helps to keep the numbers relative to now.
If it's in equities then it might be best to use both good eg. 8% and bad eg. -8% scenarios to illustrate the risk over the short term before you start drawing on it.
Personally, I tend to leave inflation out of it and just show performance above or below inflation. It's helps to keep the numbers relative to now.
LeoSayer said:
Depends what it's invested in, but I'm normally conservative to avoid disappointment.
If it's in equities then it might be best to use both good eg. 8% and bad eg. -8% scenarios to illustrate the risk over the short term before you start drawing on it.
Personally, I tend to leave inflation out of it and just show performance above or below inflation. It's helps to keep the numbers relative to now.
You make some good points.If it's in equities then it might be best to use both good eg. 8% and bad eg. -8% scenarios to illustrate the risk over the short term before you start drawing on it.
Personally, I tend to leave inflation out of it and just show performance above or below inflation. It's helps to keep the numbers relative to now.
Personally I think too many people focus on the expected / average return and ignore the potential distribution of returns - the average return for equities is a combination of lots of strong years (10-15% +) and lots of poor years (<-5-10%) with few years that actually produce 'average' returns.
Particularly when the OP is referring to just a 3 year investment horizon, then the uncertainly around the returns from risky assets such as equities and credit is significant - you could easily lose 20% on an equity portfolio over such a short period.
Over a short time horizon like this, then the OP should be thinking about investing in short-dated, fixed income assets!
Edited by sidicks on Saturday 12th December 18:42
HarryW said:
Inflation for 2015 has been around 0% afaik. Fees are?
CPI inflation has been 0% in some months. That's certainly not the same as saying that future RPI inflation will be zero!!Which current accounts are paying 2.5% without significant restrictions on account usage? After tax...
Edited by sidicks on Sunday 13th December 20:12
HarryW said:
sidicks said:
Simpo Two said:
2.5% before charges? That'll be about the same as a current account then.
Which current accounts are achieving 2.5% + inflation?Simpo Two said:
sidicks said:
Simpo Two said:
2.5% before charges? That'll be about the same as a current account then.
Which current accounts are achieving 2.5% + inflation?CarlosFandango11 said:
Simpo Two said:
sidicks said:
Simpo Two said:
2.5% before charges? That'll be about the same as a current account then.
Which current accounts are achieving 2.5% + inflation?Simpo Two said:
CarlosFandango11 said:
Simpo Two said:
sidicks said:
Simpo Two said:
2.5% before charges? That'll be about the same as a current account then.
Which current accounts are achieving 2.5% + inflation?CarlosFandango11 said:
Simpo Two said:
CarlosFandango11 said:
Simpo Two said:
sidicks said:
Simpo Two said:
2.5% before charges? That'll be about the same as a current account then.
Which current accounts are achieving 2.5% + inflation?So your pension pot grows at 2.5% before charges (we'll ignore inflation because that's basically zip). Your average IFA, if you have one, will typically take 1% to pretend to monitor your pension. That's 40% of the growth gone. But behind that, and unavoidably, the various tiers of clever folk who then manage/invest your pension will all be chipping 0.5% off here and there. And then there's bid/offer spread and all sorts of other things Joe Punter has no idea about. Essentially, 2.5% gross before charges is no growth. And that's why I said that the money would do as well in a current account. All you're doing is feeding the industry. What you want is growth AFTER all charges.
And of you think £10K is a 'pension sized amount', I shall bring you some soup in your old age
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