Average pension pot growth

[CarlosFandango11]

Simpo Two said:

Well let me see. The original premise on which my comment was based was: 'The projection rates pension companies can use have changed - now mid range growth forecast is 2.5% + inflation (but before charges are deducted).'

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

My job involves modelling insurance liabilities, things like pensions, annuities etc....

Future inflation if far from zip, 2% is a low estimate.

Your estimate of charges for pensions products seem a little on the high side compared to my experience.

I said 10k+ for the size of a pension pot, you seem to have missed the "+" - try reading my posts again... Having said that, I expect you would be surprised by the average size of a pension pot...

So, please point out these wonderful current accounts with 4% interest over the long term on 10k+

Edited by CarlosFandango11 on Sunday 13th December 23:37

[sidicks]

Simpo Two said:

Well let me see. The original premise on which my comment was based was: 'The projection rates pension companies can use have changed - now mid range growth forecast is 2.5% + inflation (but before charges are deducted).'

So your pension pot grows at 2.5% before charges (we'll ignore inflation because that's basically zip).

As explained, future inflation is not expected to be 0%

Simpo Two said:

Your average IFA, if you have one, will typically take 1% to pretend to monitor your pension.

IFAs do NOT charge 1% p.a, to 'monitor your pension'.
And IFAs are entirely optional.

Simpo Two said:

That's 40% of the growth gone.

Except of course it isn't. And then you are confusing projection rates and actual growth.

Simpo Two said:

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.

You mean investing assets actually has a cost - who'd have thought it...

Simpo Teo said:

And then there's bid/offer spread and all sorts of other things Joe Punter has no idea about.

Perhaps you'd like to educate yourself as to the sort of charging structures on current pension policies. Please provide details of the bid-offer spread on these policies...

Simpo Two said:

Essentially, 2.5% gross before charges is no growth.

Essentially you are wrong.

Simpo Two said:

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.

You seem not to understand how tax works - which current accounts are paying 2.5% net of tax?

Simpo Two said:

And of you think £10K is a 'pension sized amount', I shall bring you some soup in your old age

I think you've missed the point...