Watch your Pension Plan!!

[Z5Roadster]

ladies & Gents
On 1st November I deposited £800 into my plan 100% managed in it last 3 yrs of term (reducing Risk)

Yesterday I checked the value My plan valuation had only increased by £350 can that be right. The guy on the HELP line said,"we are in difficult times sir"

This does not effect Final Salary Plans.

CHECK YOURS OUT

[Ginge R]

Let me get this right. £800 has appreciated in value by £350 in a month? Whats the value of the pension? Are you in 'lifestyle' mode as retirement gets closer?

[esselte]

Ginge R said:

Let me get this right. £800 has appreciated in value by £350 in a month? Whats the value of the pension? Are you in 'lifestyle' mode as retirement gets closer?

Er no,I think you'll find he meant that £800 had been converted to £350 in a month....

[Bing o]

Z5Roadster said:

ladies & Gents
On 1st November I deposited £800 into my plan 100% managed in it last 3 yrs of term (reducing Risk)

Yesterday I checked the value My plan valuation had only increased by £350 can that be right. The guy on the HELP line said,"we are in difficult times sir"

This does not effect Final Salary Plans.

CHECK YOURS OUT

Do you live in a cave - have you seen the news recently?

[liner33]

No i read that as you put £800 in and the total pension amount went up by £350 so the pension lost £450 last month

I suspect everyones is doing much the same

We just had an investment come due , we deposited £10k six years ago at one point it was worth about £16.5k , this month we got our £10k back!!

[Chris_w666]

esselte said:

Ginge R said:

Let me get this right. £800 has appreciated in value by £350 in a month? Whats the value of the pension? Are you in 'lifestyle' mode as retirement gets closer?

Er no,I think you'll find he meant that £800 had been converted to £350 in a month....

Doesn't read too clearly, or did the OP mean that the fund total had increased by £350 not the £800 had?

[phumy]

esselte said:

Ginge R said:

Let me get this right. £800 has appreciated in value by £350 in a month? Whats the value of the pension? Are you in 'lifestyle' mode as retirement gets closer?

Er no,I think you'll find he meant that £800 had been converted to £350 in a month....

The 450 missing went to the plan manager as a bonus

[esselte]

Chris_w666 said:

esselte said:

Ginge R said:

Let me get this right. £800 has appreciated in value by £350 in a month? Whats the value of the pension? Are you in 'lifestyle' mode as retirement gets closer?

Er no,I think you'll find he meant that £800 had been converted to £350 in a month....

Doesn't read too clearly, or did the OP mean that the fund total had increased by £350 not the £800 had?

I think we're saying the same thing here..possibly.....he put in £800 less than a month ago and his plan is only worth £350 more now..never mind I'm sure the fund managers still get their fees....

[Neil_H]

small_print said:

"The value of investments can go down as well as up."

[Soovy]

Neil_H said:

big print on the front of the brochure due to the FSA requirements that they are written in huge font so seven the simplest of people can read them said:

"The value of investments can go down as well as up."

EFA.

[Ginge R]

In light of the clarifications, and the fact that you seem to be in the final 3 years of your pension (before tasking retirement I'll assume again), you refer to being in a mode of reduced risk (known as lifestyling). Did your fund managers transfer out of equities and plump for the safer options as you seem to be implying they should have done?

http://www.telegraph.co.uk/finance/personalfinance...
http://www.telegraph.co.uk/finance/2806344/Norwich...

Z5Roadster said:

ladies & Gents
On 1st November I deposited £800 into my plan 100% managed in it last 3 yrs of term (reducing Risk)

Yesterday I checked the value My plan valuation had only increased by £350 can that be right. The guy on the HELP line said,"we are in difficult times sir"

This does not effect Final Salary Plans.

CHECK YOURS OUT

[Zod]

the best thing to do with your pension plan at the moment is to keep contributing (shares are becoming cheap in historical terms) and not look at the plan value, because doing so will depress you. Remember that your pension plan is a long-term investment.

[Ginge R]

The market is certainly undervalued at the moment and there are some great bargains - the crisis seems to be not in empty order books, but more in market semtiment. The issue with Z5 seems to be in the timing, he might not have the benefit of being able to have that long term perspective.

[Glosphil]

I complained to the company that 'manages' one of my pension plans concerning its drop in value. I received a four page reply that can be summed up as - when the plan does well it is due to the expertise of our fund managers, when your plan does badly it is because you did not have the sense to switch to another type of fund.

Increasing the fund value in a raising market is not difficult, i's in a falling market that I need the managers to use their expertise. If changing the type of fund would have been a good idea why didn't they write or email me suggesting it?

[davemac250]

Yes, looks like from the post he is in the last three years.

I struggle to understand why some of the pension companies haven't removed all risk from their plans and moved across to Money Markets or deposit accounts for those nearing retirement. Not like this has been a surprise sudden crash. Sitting with their fingers crossed that it will all get better seems to have been the management offered by some of these companies.

[Andy Zarse]

I'm not sure I get the point? If his fund was worth say £10,000 last month and he added the £800, is he saying it's now only worth £10,350. A 4.5%-ish fall is perfectly reasonable and within the bounds of possibilities in the current market I'd have said.

Also, what's all this crap about final salary pensions not being affected? What do you think they invest in? Magic beans or money?

[Andy Zarse]

Glosphil said:

If changing the type of fund would have been a good idea why didn't they write or email me suggesting it?

Simple. They are not allowed to by the FSA. It's called consumer protection. Of course, it's all the fault of greedy fund managers...

Phil, do you have an ongoing advice agreement with an IFA or stockbroker for example?

[esselte]

Andy Zarse said:

I'm not sure I get the point? If his fund was worth say £10,000 last month and he added the £800, is he saying it's now only worth £10,350. A 4.5%-ish fall is perfectly reasonable and within the bounds of possibilities in the current market I'd have said.

Also, what's all this crap about final salary pensions not being affected? What do you think they invest in? Magic beans or money?

Surely a final salary pension has a definite value at the end...you know what you'll get,that's why they're called "defined benefit" ie it doesn't matter how much your fund actually has in it the pension you recieve will be related to your final salary and the number of years service you have.. unlike the other sort where you only know how much it'll cost you,not what you'll get back.... "defined contribution"...this is probably why just about the only people who are now in a defined benefit product are the "other worldly" public service employees...

[Ponk]

esselte said:

Andy Zarse said:

I'm not sure I get the point? If his fund was worth say £10,000 last month and he added the £800, is he saying it's now only worth £10,350. A 4.5%-ish fall is perfectly reasonable and within the bounds of possibilities in the current market I'd have said.

Also, what's all this crap about final salary pensions not being affected? What do you think they invest in? Magic beans or money?

Surely a final salary pension has a definite value at the end...you know what you'll get,that's why they're called "defined benefit" ie it doesn't matter how much your fund actually has in it the pension you recieve will be related to your final salary and the number of years service you have.. unlike the other sort where you only know how much it'll cost you,not what you'll get back.... "defined contribution"...this is probably why just about the only people who are now in a defined benefit product are the "other worldly" public service employees...

You're right in saying that your own personal benefits are based on final salary vs years service (in most cases) not on the performance of the fund. However if the fund (as a whole) has lost money due to the credit crunch then contribution rates may have to go up to reduce the deficit(which may affect you if the scheme is shared cost).

For the likes of me (mid twenties and in a DC Pension arrangement) the credit crunch could actually leave me better off, as essentially i'm getting more for my money and i've got 40 odd years for share prices to get back to their previous values.

[mini me]

So for someone just starting out with a pension. Say i started one about 6 months before all this economic crisis. What would be the best thing to tell your fund manager type people to do?

I was given a choice of big risk/possibly high gains to very low risk but small gains on a scale of 1-10 and asked where i wanted my money put. i said 5. Would now be a good time to change to 10 as all share prices are low?