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Private pension. I don't understand!
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- Lifer
- Posts: 8623
- Joined: Wed Jan 20, 2021 7:20 pm
- Location: Spaldingski
Private pension. I don't understand!
I have a 100% private pension, as I have worked for myself forever.
Between around 2000 and 2020, my pensions (I have a couple, can't even remember why) my 'pot' was growing at an average of around 6% a year.
In 2021 and 2022 my 'pot' decreased by around 3%. In 2023 it continued to fluctuate up and down with a net gain of around nothing.
Suddenly in the last couple of months it has started to rise quite sharply again; I am talking 1% in a week!
Does anyone know why this would be? I have no idea how this financial wizardry works. I don't see the world economy suddenly getting stronger and certainly not the UK.
Between around 2000 and 2020, my pensions (I have a couple, can't even remember why) my 'pot' was growing at an average of around 6% a year.
In 2021 and 2022 my 'pot' decreased by around 3%. In 2023 it continued to fluctuate up and down with a net gain of around nothing.
Suddenly in the last couple of months it has started to rise quite sharply again; I am talking 1% in a week!
Does anyone know why this would be? I have no idea how this financial wizardry works. I don't see the world economy suddenly getting stronger and certainly not the UK.
All good things come to those who wait. I'm really impatient which explains a lot.
F31 320i. Good car.
E89 20i Now fully dried
Z3 'free litre'. Project and a half. Complicated!
Mazda3 sold
Tatty old R56 Mini Cooper. Money pit!
F31 320i. Good car.
E89 20i Now fully dried
Z3 'free litre'. Project and a half. Complicated!
Mazda3 sold
Tatty old R56 Mini Cooper. Money pit!
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OnlineScubaregs
- Lifer
- Posts: 3049
- Joined: Thu Jul 01, 2021 7:36 am
Private pension. I don't understand!
I transferred 2 final salary pensions into a drawdown 5/6 years ago. I keep track of it and pretty much mirrors what you have found.
Covid, Russia/Ukraine war etc all had a detrimental effect, however last few weeks it has started rising again and 1% in a week sounds about right.
Pound is strong against the dollar at the moment, but tbh I don't think that is the reason.
There will always be peaks and troughs, as lond as the underlying trend is upwards, I'm happy.
Covid, Russia/Ukraine war etc all had a detrimental effect, however last few weeks it has started rising again and 1% in a week sounds about right.
Pound is strong against the dollar at the moment, but tbh I don't think that is the reason.
There will always be peaks and troughs, as lond as the underlying trend is upwards, I'm happy.
Abstinence is fine, in moderation.
San Francisco red G29 30i. BMW S1000r Sport.
San Francisco red G29 30i. BMW S1000r Sport.
- buzyg
- Legend
- Posts: 26605
- Joined: Fri May 20, 2011 6:11 pm
- Location: Cornwall
Private pension. I don't understand!
Yup that Russian dictator chap cost us 10s of thousands, that I won't get back as I have been drawing down one of my pension pots to pay off mortgages. Interesting first word problems. Good to hear your pot is on the rise.
Last edited by buzyg on Thu Dec 14, 2023 6:00 pm, edited 1 time in total.
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- Lifer
- Posts: 8623
- Joined: Wed Jan 20, 2021 7:20 pm
- Location: Spaldingski
Private pension. I don't understand!
I stopped paying contributions quite a few years ago, as put that money into paying off debts instead.
As I can now get 5% on savings/ ISAs, I am putting money in these rather than my pension.
I am now 56 and have been thinking of transferring all funds into a 'draw down' product. I don't need to draw on it yet but would like the opportunity to be there. I have always been a big fan of having any money I have (which has never been much TBH) easily accessible. It has cost me a bit in lower interest but I just don't like money being locked away; just in case.
My largest pension with Zurich doesn't allow me the 25% withdrawal which I don't like.
As I can now get 5% on savings/ ISAs, I am putting money in these rather than my pension.
I am now 56 and have been thinking of transferring all funds into a 'draw down' product. I don't need to draw on it yet but would like the opportunity to be there. I have always been a big fan of having any money I have (which has never been much TBH) easily accessible. It has cost me a bit in lower interest but I just don't like money being locked away; just in case.
My largest pension with Zurich doesn't allow me the 25% withdrawal which I don't like.
All good things come to those who wait. I'm really impatient which explains a lot.
F31 320i. Good car.
E89 20i Now fully dried
Z3 'free litre'. Project and a half. Complicated!
Mazda3 sold
Tatty old R56 Mini Cooper. Money pit!
F31 320i. Good car.
E89 20i Now fully dried
Z3 'free litre'. Project and a half. Complicated!
Mazda3 sold
Tatty old R56 Mini Cooper. Money pit!
- obewan
- Senior Member
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- Joined: Sun Oct 27, 2013 8:53 pm
- Location: End of A590 cul de sac (South Cumbria)
Private pension. I don't understand!
Yep, what Scubaregs & buzyg said
In June I asked my financial advisor guy why it wasn't going up now that things had 'stabilised' a bit on the war front. He said it wasn't just that, but the financial institutions didn't like the uncertainty over interest rates and something (that was beyond me) that there was reluctance to buy bonds (or payback ??) as money could be secured cheaper elsewhere
In June I asked my financial advisor guy why it wasn't going up now that things had 'stabilised' a bit on the war front. He said it wasn't just that, but the financial institutions didn't like the uncertainty over interest rates and something (that was beyond me) that there was reluctance to buy bonds (or payback ??) as money could be secured cheaper elsewhere
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- obewan
- Senior Member
- Posts: 1545
- Joined: Sun Oct 27, 2013 8:53 pm
- Location: End of A590 cul de sac (South Cumbria)
Private pension. I don't understand!
Have a chat with a SOLLA financial guy (Society of later life advisors)
First chat is normally free
First chat is normally free
E89 2.0 SDrive MSport
Honda CB500F.
Gone but not forgotten E85 2.0 MSport
Honda CB500F.
Gone but not forgotten E85 2.0 MSport
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- Lifer
- Posts: 8623
- Joined: Wed Jan 20, 2021 7:20 pm
- Location: Spaldingski
Private pension. I don't understand!
I have a financial advisor who keeps calling me every year or so to see if he can make a few quid by "arranging" my drawdown product. I always keep him on the phone for a while asking lots of questions. I am not paying him a penny; his fees are percentage-based which works out to thousands of my pot being thrown at him.
I don't like IFAs to be honest. Every one I have ever dealt with have always recommended products which pay them the most, not which are best for what I want.
I want a drawdown product which is simple to understand and easy to manage. Some of the suggestions my IFA has come up with are so complex for the sake of potentially making a couple of extra quid, which I would be paying ten times over to him for the privilege. No thanks!
All good things come to those who wait. I'm really impatient which explains a lot.
F31 320i. Good car.
E89 20i Now fully dried
Z3 'free litre'. Project and a half. Complicated!
Mazda3 sold
Tatty old R56 Mini Cooper. Money pit!
F31 320i. Good car.
E89 20i Now fully dried
Z3 'free litre'. Project and a half. Complicated!
Mazda3 sold
Tatty old R56 Mini Cooper. Money pit!
- darich
- Member
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Private pension. I don't understand!
I'd have thought you're better off paying the pension because it's not taxable. I understand the want/need to have a fund which is readily available so if you're building that, I totally get it. But once that's done, the better idea would be to chuck it at a pension to save on the tax.
Previously 2004 Sterling Grey E85 3.0SE
Currently 2007 Silver Grey E86 M Sport
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Currently 2007 Silver Grey E86 M Sport
Instagram - Zed4Coupe
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OnlineScubaregs
- Lifer
- Posts: 3049
- Joined: Thu Jul 01, 2021 7:36 am
Private pension. I don't understand!
As Darich says, pay it into your pension and save on the tax. The pension should give you a better return but there is always a risk.
As to your IFA and moving to a drawdown, above a certain amount you must take independent financial advice in order to move it, and yes these guys charge a percentage to do so, and to manage it. Of course, like everything in life it should be negotiable, I saved a significant amount by doing so. Tbf, the IFA has outlays too, an actuarial calculation will be required to show if moving to a drawdown is your best option and that isn’t cheap.
As to your IFA and moving to a drawdown, above a certain amount you must take independent financial advice in order to move it, and yes these guys charge a percentage to do so, and to manage it. Of course, like everything in life it should be negotiable, I saved a significant amount by doing so. Tbf, the IFA has outlays too, an actuarial calculation will be required to show if moving to a drawdown is your best option and that isn’t cheap.
Abstinence is fine, in moderation.
San Francisco red G29 30i. BMW S1000r Sport.
San Francisco red G29 30i. BMW S1000r Sport.
- pvr
- Legend
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- Location: South East UK
Private pension. I don't understand!
Had my statement for one of the private plans a week or so back, and the amount I have contributed over 35 years is the same as the value, i.e. 0 growth.
If I had put it in an interest account of any value I would have been better off with that one then
I am relunctant to put any more than my regular contribution in as it starts feeling like throwing money away.
If I had put it in an interest account of any value I would have been better off with that one then
I am relunctant to put any more than my regular contribution in as it starts feeling like throwing money away.
Current:
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911-50 Black - unique spec
X5M - 575 hp of fun in a V8
Abarth 595 Comp.
Golf Clipper - collectors item
Z4 3.0si Black Sapphire
VW ID.3
Previous:
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Z4 3.0 Toledo
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- Lifer
- Posts: 8623
- Joined: Wed Jan 20, 2021 7:20 pm
- Location: Spaldingski
Private pension. I don't understand!
That isn't strictly true. The pension company ask if you have taken advice, you just have to say yes! You don't have to prove it. They are covering their arses as are not allowed to give financial advice. They can tell you about the products they offer, though.
All good things come to those who wait. I'm really impatient which explains a lot.
F31 320i. Good car.
E89 20i Now fully dried
Z3 'free litre'. Project and a half. Complicated!
Mazda3 sold
Tatty old R56 Mini Cooper. Money pit!
F31 320i. Good car.
E89 20i Now fully dried
Z3 'free litre'. Project and a half. Complicated!
Mazda3 sold
Tatty old R56 Mini Cooper. Money pit!
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- Lifer
- Posts: 8623
- Joined: Wed Jan 20, 2021 7:20 pm
- Location: Spaldingski
Private pension. I don't understand!
Really? I find that strange. I have one from 1986 which was a 'SERPS' opt out thing. I have never paid a penny into it (as I forgot I had it until about 10 years ago) and it is worth 325% more than it was in 1986.
Mind you, Paul, we all know you are 'minted' so you won't get much sympathy!
All good things come to those who wait. I'm really impatient which explains a lot.
F31 320i. Good car.
E89 20i Now fully dried
Z3 'free litre'. Project and a half. Complicated!
Mazda3 sold
Tatty old R56 Mini Cooper. Money pit!
F31 320i. Good car.
E89 20i Now fully dried
Z3 'free litre'. Project and a half. Complicated!
Mazda3 sold
Tatty old R56 Mini Cooper. Money pit!
- darich
- Member
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- Joined: Wed Feb 13, 2008 8:15 pm
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Private pension. I don't understand!
If you'd put it in an account you'd have paid tax on it before depositing it. So whatever tax rate you pay, is the amount less you'd have if you'd put it in the bank.pvr wrote: ↑Thu Dec 14, 2023 1:38 pm Had my statement for one of the private plans a week or so back, and the amount I have contributed over 35 years is the same as the value, i.e. 0 growth.
If I had put it in an interest account of any value I would have been better off with that one then
I am relunctant to put any more than my regular contribution in as it starts feeling like throwing money away.
Previously 2004 Sterling Grey E85 3.0SE
Currently 2007 Silver Grey E86 M Sport
Instagram - Zed4Coupe
Currently 2007 Silver Grey E86 M Sport
Instagram - Zed4Coupe
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- Senior Member
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Private pension. I don't understand!
Come on Andy. You just want money readily available to buy yet more cars.Pondrew wrote: ↑Thu Dec 14, 2023 1:48 pmReally? I find that strange. I have one from 1986 which was a 'SERPS' opt out thing. I have never paid a penny into it (as I forgot I had it until about 10 years ago) and it is worth 325% more than it was in 1986. :
Mind you, Paul, we all know you are 'minted' so you won't get much sympathy!
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- Lifer
- Posts: 8623
- Joined: Wed Jan 20, 2021 7:20 pm
- Location: Spaldingski
Private pension. I don't understand!
I was reading up on some pension stuff online the other day.
Apparently the average net solvent assets for a person of state pension age (65/67) in the UK in 2023 is £37,000! That includes private pensions.
I was shocked it was so low TBH. That must mean there are millions of people with absolutely nothing at state pension age.
No wonder the workplace pension is now compulsory.
Apparently the average net solvent assets for a person of state pension age (65/67) in the UK in 2023 is £37,000! That includes private pensions.
I was shocked it was so low TBH. That must mean there are millions of people with absolutely nothing at state pension age.
No wonder the workplace pension is now compulsory.
All good things come to those who wait. I'm really impatient which explains a lot.
F31 320i. Good car.
E89 20i Now fully dried
Z3 'free litre'. Project and a half. Complicated!
Mazda3 sold
Tatty old R56 Mini Cooper. Money pit!
F31 320i. Good car.
E89 20i Now fully dried
Z3 'free litre'. Project and a half. Complicated!
Mazda3 sold
Tatty old R56 Mini Cooper. Money pit!