Pension worries, not sure what to do
Discussion
Long time since I posted here, but do look every few days :-) just don't feel I can contribute much to anything..
I'm a little concerned about retirement (I'm 25 years away from it).
I've got a workplace pension with Peoples Pension, current balance is £26,124 with a projected end value of £76123 (figures are approx. as they change constantly. )
1 week ago figures were approx. £28,900 end value £79600 (again approx.) So it has lost a fair amount in a week.
If I move to another provider it'll cost fees and employer wont contribute (employer contribution is £160/Month).
Do I continue paying in? or stop contributions as it seems like throwing cash down the drain.
I keep hearing "It will come back" but we seem to be going from 1 disaster to another and pensions are constantly getting bashed.
Any thoughts gratefully received.
D
I'm a little concerned about retirement (I'm 25 years away from it).
I've got a workplace pension with Peoples Pension, current balance is £26,124 with a projected end value of £76123 (figures are approx. as they change constantly. )
1 week ago figures were approx. £28,900 end value £79600 (again approx.) So it has lost a fair amount in a week.
If I move to another provider it'll cost fees and employer wont contribute (employer contribution is £160/Month).
Do I continue paying in? or stop contributions as it seems like throwing cash down the drain.
I keep hearing "It will come back" but we seem to be going from 1 disaster to another and pensions are constantly getting bashed.
Any thoughts gratefully received.
D
996owner said:
Long time since I posted here, but do look every few days :-) just don't feel I can contribute much to anything..
I'm a little concerned about retirement (I'm 25 years away from it).
I've got a workplace pension with Peoples Pension, current balance is £26,124 with a projected end value of £76123 (figures are approx. as they change constantly. )
1 week ago figures were approx. £28,900 end value £79600 (again approx.) So it has lost a fair amount in a week.
If I move to another provider it'll cost fees and employer wont contribute (employer contribution is £160/Month).
Do I continue paying in? or stop contributions as it seems like throwing cash down the drain.
I keep hearing "It will come back" but we seem to be going from 1 disaster to another and pensions are constantly getting bashed.
Any thoughts gratefully received.
D
It's a long term investment. I'm of the opinion that we're currently in the middle of a bit of a perfect storm but it will all recover over timeI'm a little concerned about retirement (I'm 25 years away from it).
I've got a workplace pension with Peoples Pension, current balance is £26,124 with a projected end value of £76123 (figures are approx. as they change constantly. )
1 week ago figures were approx. £28,900 end value £79600 (again approx.) So it has lost a fair amount in a week.
If I move to another provider it'll cost fees and employer wont contribute (employer contribution is £160/Month).
Do I continue paying in? or stop contributions as it seems like throwing cash down the drain.
I keep hearing "It will come back" but we seem to be going from 1 disaster to another and pensions are constantly getting bashed.
Any thoughts gratefully received.
D
Is the company contribution a combination of employer and employee contributions? Is it worth you pushing up your contributions? Something that I am definitely looking to do (at 47) as disposable income improves
Many people think about it upside down.
If you are 15+ years away from retirement and still actively contributing, it's great that the markets are low. It means you can buy more units with your money. Ideally you want the markets low for most of the time you are contributing.
It's half of the well known phrase "buy low, sell high".
If you are 15+ years away from retirement and still actively contributing, it's great that the markets are low. It means you can buy more units with your money. Ideally you want the markets low for most of the time you are contributing.
It's half of the well known phrase "buy low, sell high".
The stock markets have taken an absolute battering this year. Everybody's pension is down. Moving to another provider won't change that. But what you've been told is right: it will come back. You have 25 years of investment growth to come so don't panic.
If you're not a sophisticated investor then there are two simple rules with pensions. (1) Put in as much as you can. (2) Ignore it until you want to retire.
For those who understand the markets, have significant incomes and more complex tax affairs, the above may vary. But for the rest of us, follow the above and you won't go far wrong.
If you're not a sophisticated investor then there are two simple rules with pensions. (1) Put in as much as you can. (2) Ignore it until you want to retire.
For those who understand the markets, have significant incomes and more complex tax affairs, the above may vary. But for the rest of us, follow the above and you won't go far wrong.
It’s too easy to keep a constant check, via apps etc & get depressed by the constant fluctuations.
Mines down 20% this year. But looking in the bright side, it’s back where it was 12 months ago. About the same as if it was left in the bank…
So it the old fashioned way, check it once a year!
Mines down 20% this year. But looking in the bright side, it’s back where it was 12 months ago. About the same as if it was left in the bank…
So it the old fashioned way, check it once a year!
996owner said:
Do I continue paying in? or stop contributions as it seems like throwing cash down the drain.
Pensions / Investments are a long term play - they are supposed to go down along the way - I have tracked mine over the years and they do the same - i.e regularly down by a big amount only to recover just as quickly and ultimately, always go up with time - I think one of the misunderstandings with pensions is that you only ever see an annualised growth number which hides the fact that it is wanging around sometimes quite significantly in between the two measurement points. Now that you are looking in a bit more detail, you'll see the same. Worth remembering that while the market is tanking, there has never been a better time to buy pension units - i.e. every unit you buy at today's prices is cheaper than it was for the same unit a few weeks / months ago. A veritable bargain for your 65 year old self. When it does recover, you'll look back to now, and think that they were cheap and that you should have bought more!!
A thing to consider is are you in the right investments (i.e. risk) for your age. and if you are a long way off retirement, then it sounds like you are (because big drops = slightly higher risk = big gains long term).
The other thing to remember is ALWAYS max out your employer contribution. For every pound you put in, you are getting tax relief plus a matched contribution from your employer - i.e. way more than double the after taxed amount that you could otherwise have - you'd have to have a damn good reason not to pay in to a pension when there is an employer match in play.
This is the equity risk premium - and is a key part of the long term returns you should receive - without these drawdowns / volatility - you wouldn’t make above inflation long term returns - try and think of it that way.
If you are concerned and can’t contribute more - check your investment fee’s.
Over the long term these can have a big Impact on your net returns. If you’re paying anything near 1% I’d be doing a review of your investments.
I DIY so can expect slightly lower fee’s, but am paying in the region of 0.2% for my workplace pension.
If you are concerned and can’t contribute more - check your investment fee’s.
Over the long term these can have a big Impact on your net returns. If you’re paying anything near 1% I’d be doing a review of your investments.
I DIY so can expect slightly lower fee’s, but am paying in the region of 0.2% for my workplace pension.
996owner said:
Long time since I posted here, but do look every few days :-) just don't feel I can contribute much to anything..
I'm a little concerned about retirement (I'm 25 years away from it).
I've got a workplace pension with Peoples Pension, current balance is £26,124 with a projected end value of £76123 (figures are approx. as they change constantly. )
1 week ago figures were approx. £28,900 end value £79600 (again approx.) So it has lost a fair amount in a week.
If I move to another provider it'll cost fees and employer wont contribute (employer contribution is £160/Month).
Do I continue paying in? or stop contributions as it seems like throwing cash down the drain.
I keep hearing "It will come back" but we seem to be going from 1 disaster to another and pensions are constantly getting bashed.
Any thoughts gratefully received.
D
Week to week moves don’t matter, it’s a long term investment. I'm a little concerned about retirement (I'm 25 years away from it).
I've got a workplace pension with Peoples Pension, current balance is £26,124 with a projected end value of £76123 (figures are approx. as they change constantly. )
1 week ago figures were approx. £28,900 end value £79600 (again approx.) So it has lost a fair amount in a week.
If I move to another provider it'll cost fees and employer wont contribute (employer contribution is £160/Month).
Do I continue paying in? or stop contributions as it seems like throwing cash down the drain.
I keep hearing "It will come back" but we seem to be going from 1 disaster to another and pensions are constantly getting bashed.
Any thoughts gratefully received.
D
Peoples pension are crap, but if they’re who your employer has chosen then it’s tough luck. If you were to move to another employer you could transfer out later.
Continue paying in. And model your retirement in more detail. As I suspect that 79k wouldn’t be a large enough pot to retire on and have a comfortable retirement.
Olivera said:
Unless you can significantly increase contributions then I'd forget about it and live on state pension + benefits upon retirement.
This.A pension pot of £75k is not going to go very far in 25 years time. It would buy you an annuity of around £4k. Take inflation into account, and that probably means £1500-2000 per annum in today's money.
996owner said:
Noted that 76K isn't much. Yes I can add more my contributions (I put in £130)
I just didn't want to keep ploughing good money in. I'd rather chuck it off the mortgage.
Again - the mortgage might save you a couple of percent overall which is very little in the grand scheme of things.I just didn't want to keep ploughing good money in. I'd rather chuck it off the mortgage.
Whereas a pound in a pension is already worth over 2 plus the growth to come...
So while it "feels" nice to pay the mortgage down - it is almost certainly not a "better" investment than paying into an employee matched pension.
If I was you, 25 years off retirement, I'd be trying to pay a hell of a lot more into my pension than £130 a month - it's unlikely that this is enough tbh!
Given your timeframe to retirement....when the markets are taking a battering, that's the time to fill your boots and increase pension contributions especially if you are a higher rate tax payer, the more 40% tax you can avoid the better!
Last year , along with employer contributions I put about 30% of my gross salary into the pension...unlikely I will/can maintain that level going forward but think it's wise to at least contribute enough to get the max employer match.
The biggest challenge (for me anyway) is balancing pension/S&SISA/cash savings as only the last two are accessible before retirement age.
Last year , along with employer contributions I put about 30% of my gross salary into the pension...unlikely I will/can maintain that level going forward but think it's wise to at least contribute enough to get the max employer match.
The biggest challenge (for me anyway) is balancing pension/S&SISA/cash savings as only the last two are accessible before retirement age.
I stuck an additional 15% of salary in my pension from my first pay check, and maintained it. I think the mandatory contribution was 6% at the them, so I was doing 21%. Never noticed the missing money as I never had it in the first place.
That has got me to a very decent sum, but when you run the annuity calculations, the returns are dreadful. Thank god you don’t need to buy annuities any more!
That has got me to a very decent sum, but when you run the annuity calculations, the returns are dreadful. Thank god you don’t need to buy annuities any more!
Guilty of the same. Very keen on having a detailed understanding of my position so check accounts daily, pensions at least once a week. Deferred stuff I usually manage to leave 6 monthly!
19 yrs for me to planned retirement. Pay around 11%. Would like to pay more but other priorities at the moment.
Also have an ISA which I'd hoped would outperform the 2% mortgage interest (28yrs remaining) but at the moment it's not looking great. Two more years until renewal.
Shocks me so many of my colleagues just pay the base/minimum. A lot don't know what pension they're in or what they're entitled to.
It's going to be a big problem in future that's for sure.
19 yrs for me to planned retirement. Pay around 11%. Would like to pay more but other priorities at the moment.
Also have an ISA which I'd hoped would outperform the 2% mortgage interest (28yrs remaining) but at the moment it's not looking great. Two more years until renewal.
Shocks me so many of my colleagues just pay the base/minimum. A lot don't know what pension they're in or what they're entitled to.
It's going to be a big problem in future that's for sure.
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