Pension advice sought

So I reviewed my pension today.

The fund name is “L&G PMC Multi Asset 3”.

I put in a decent amount.

Since 2017, it’s made 9.3% in interest. That’s not per year, it’s total over 7 years.

That seems pretty woeful to me.

What would be a better performing but sensible risk fund to go into please?

Company pension?  You’ll likely be limited to specific L&G funds so the usual Vanguard fund answer that comes up on here won’t be much use

A quick Google and I found a Reddit post that stated most of the increase in value since 2018 has been in the last year.

Might not be the best time to get out of it, however some diversification would be advisable if you’re 100% in the fund you’ve mentioned.

Do your employer make provision for pension advice?  I’d explore that.

Is it a company pension or SIPP?

Either way, that is a truly dismal performance.

It’s a company pension but I’m free to move it around. What is this Vanguard option please?

I have financial advisors almost as much as car salesmen and double glazing companies, but I wouldn’t be getting my pension advice from a MTB forum.

theres a bunch of things to consider: your age, your planned retirement, your family circumstance, your personal risk appetite, your willingness to actively manage your investment, the funds available to you, what other investments (if any) you have, etc. etc.

Yep, details are sparse.  If you are near retirement age, then it might be lifestyling, ie, proportionately shifting into bonds and cash so growth would be stifled, but it “should” be safe. Aside from Liz Truss, obvs.

What is this Vanguard option please?

Vanguard is the vanilla of funds. Its just a bunch of top end companies. No buying low and selling high chasing the market stuff. It tracks the market and makes nice steady gains with low fees.

but I wouldn’t be getting my pension advice from a MTB forum.

Each to their own. I’ve had some great advice off here and made some significant changes to the way I invested. Very happy with where am I now and in a much better place that I was.

How old are you and when do you want to retire. This will help you decide how much risk to take.

I wouldn’t listen to a MTB forum either. I would go and see a professional ifa
Who could charge me to guess which funds are going to outperform the market in the future. They have the same ability to do this as fat middle aged men who mess about in the woods on bikes
It’s late , for me . I’m tired but will pop back tomorrow.
You are going to learn a whole new vocabulary used to describe how money is invested , and as you say you have earned interest over the last 7 years which is not entirely correct there will be some level of reading , absorbing and understanding pension investing.
More info required though , age , marriage , kids , mortgage, employment status , aspirations , your ability to work at 55 , 60 , 65 doing what you do. Savings , lots of parameters.

Can I put you towards a few YouTube channels of Financial advisers?

https://www.youtube.com/@JamesShack

https://www.youtube.com/@DamienTalksMoney/videos?view=0&sort=dd&shelf_id=0

Hint – that L&G fund has been dire, as it has a large holding of bonds, which crashed massively under Liz Truss. I’ll be willing to bet the fees are big as well. My wife’s new workplace pension is with L&G with @0.7% platform fees plus 0.8% AMC.

You need to clear your diary and get stuck into proper research.

Be aware that any consultation with an IFA or CFP will cost you – except for an initial meeting/discussion where they will give away little of value.

Ignoring the (stupid) comments about fat middle aged blokes messing about on bikes in woods, singletrackmind’s final paragraph tells you – in very broad terms – how you should start thinking about your position.

There are many more potential considerations – but only you know what they are.

I’ve put your Fund against my portfolio in Trustnet. It suggests it should’ve grown by 23%, which shows how big your fees are….

I reckon that fund is at least 50% bonds. How long do you have to retirement?

Hargreaves and lansdown now doing prebuilt pension plans

Hargreaves Lansdown ready-made pension plan – How does it compare?

The plans are newish so no idea about how well they will do.

https://www.moneysavingexpert.com/savings/cheap-sipps/

Not enough information above to make recommendations as others have said… risk appetite time to retirement etcetc

I have a L&G company pension from an old job,

I could choose my own investments on their website or stick with the default.

I have picked a passive global tracker with low fees.

that would be my default recommendation, without knowing anything or enough about you…

but… if you haven’t already heard of Vanguard you either have a lot of reading on pensions to do, or a visit to an ifa…

also above you tubes are good, James & Damien talk a lot of sense

I would watch some pensioncraft videos too

Yep – I like pensioncraft too, but I reckon he’s more next level.

Time to retirement is only really a big factor if you are buying an annuity. If you are going into drawdown you should be able to ride out most of the ups and downs and have a reasonable % in equities.

Not sure I totally agree with that. A drawdown pot needs cash/bond allocations to mitigate sequence of returns risk.

If you leave that until retirement day, you are just hoping that you retire at the top of the market.

I’m 10 years out and just starting to diversify 10% into money market funds and single bonds/gilts. They yield 5% currently without the volatility of bond funds.

I’ve also got a L&G pension, it’s been dire. Last I looked it was up just over 1% over the 7 years I have had it.

I probably ought to shift it.

That does sound rubbish OP. I have had to nosy at my funds and do some learning – some of those YT links above are really helpful.

I am in a Standard Life Stakeholder pension plan, within the Ethical fund. When I took the Pension out I only had two funds within it – and one was not great so I missed a good few years of growth. I learned and acted, got an online login and the app. I now have 11 different funds and I check on them about quarterly (I have a note in my diary to remind me). I try to balance out my funds because of volatility as I near 50 – so when one does really well I take the ‘profit’ and spread it back across the other funds. I am in moderate and higher risk funds though. I chose funds using what was offered on Standard Life and ‘Trustnet’ – they are spread geographically and across a few ethical / green areas, so to spread risk around. e.g. if renewable energy folds overnight I have some funds which focus on biotech/technology, some in property, a few that are just trackers.

My plan is that as I near 55 I will really move back to safer funds, aiming to even out some of the ups and downs and steadily progress to retiring. Currently I am able to save a lot into the Pension each month, and also feel that now is the time to really make some gains if I can.

I have had one fund tank – funnily enough the one which is Government Bonds, but I also have some that are on really good performance. I also had one that just constantly did not perform so well.

The last year I have funds that have done between 6% and 24%. Over the last 10 years all funds are up between 42% and 313%.

I have a 0.6% fee each year.

AFAIK and IANAE if it’s an auto-enrolment pension they tend to get put in bog-standard low risk funds?

Pension and investment advice gets progressively more complicated the more you go down the rabbit hole, but I think it’s more important to at least make a start and then refine your strategy over time.

I also think that pension angst also stops people from engaging and that is also a shame.

The first step for me was putting my money in a tracker with low management fees. Not sophisticated, and with some risk, but it’s a reasonable place to start whilst you start to refine your strategy.

Also do bear in mind that somewhere between 25 and 40 percent of the money in your pension fund will have been put there by the government, so there is that as well.

I have an L&G pension they’re fine – one of their funds is equiv to a passive global (not a ftse) tracker, so I just put all the money is in that. Having just checked it seems to have gone up 56% in the past 3.5 years which sounds about right.

The fees are also low – 0.06% so that shouldn’t be a problem.

OP – Does sound like you have had a raw deal – how did you end up with that fund? Without knowing anything about you, the standard advice is to put your pension in a passive global tracker with the lowest fees possible. Don’t try and guess the market – mugs game (que 20 people telling me they’ve beaten the market), even most professional fund managers fail to do it and it’s literally their job. You should be able to go onto the website and change the fund you’re invested in if you decide to do that (I would do some research myself or take advice if I were you first as only you know your personal situation).

If you have a reasonable time left to retire then a global equity fund is probably the best option – note that the PensionCraft guy and also the Damien talks money guy have both discussed this and the risks involved in fund choice and they both have their main portfolio in global funds – as they have no more of an idea about what is going to happen than anyone else.

It’s the same with IFAs, they’ve got little idea as well and often it’s often worse than that as they think that they do. History showed that bonds were going to be a bad place to be with rising interest rates (even ignoring Truss) yet none of the usual YT finance channels pointed this out.

As above I would talk to the ‘experts’ but there is nothing wrong with listening to others strategies and musings here before making the decision that you are comfortable with. One thing I would suggest is ask yourself how much do you want/need in retirement and therefor what do you need to do now to get your pot to that point, is it increased contributions, increased returns (usually means greater risk, what is you appetite for risk and possible/likely big drops along the way) or are you ok with your plan?

for me, my money is in high risk equities (global but mainly US). I am getting good returns and I feel it’s the only way I can get my fund to where I want it, when I want it, without pumping more contributions in that I cannot afford. I am ok with risk and the big swings that go along with it. (The following are rough figures from my pension provider, Irish life). My fund dropped 50% during Covid and 30% a couple of years ago but it is up 225% over the last 10 years and averaged about 12% a year over the last 15 years. When I compare this to the middle risk funds available to me, they lost about 30% during Covid and  15-20% a few years ago, so yes they lost less and are safer but have only returned 70-80% over the last 10 years. My thinking is that if my fund tanks, and it will again at some point, the gains I have made over the years help soften the blow for me. If I do the sensible thing a put my money into safer/lower risk funds I will need to work longer to reach my goal. My hope is, my high risk investments will let me retire earlier, but if they tank at the wrong time I will just need to work longer until they recover so essentially just be in the same place as if I was in lower risk, but this way I have a chance to get out early. Once I hit my magic number I am gone.

please do not think I, for one minute am in anyway qualified to offer advice, I am merely stating what I am doing, which goes against the majority of the abvice you will get and highlights how peoples advice and strategies will vary wildly depending on so many different factors.

There’s a chap, initials AM, from near Glasgow who used to be (don’t know if he still is) on this forum and would contact members who asked about pensions. He contacted me several years ago and I’m glad he did. Sorted me out with a SIPP that I’m very happy with.
If he contacts the OP, I would recommend him. If he doesn’t I could put you in touch.

Some good advice here.

More about me then. Divorced, single, one adult child, 50 years old. Homeowner. Some savings in premium bonds. Would like to retire between 60 and 65. I’m looking for my pension to at least beat inflation on my contributions.

I can see 2019 was poor and in 2020 it tanked. For 2024 is showing around 20% – is that 20% growth?

L&G PMC Multi-Asset 3 (Fund ID: NTW3)
Fund aim: To provide long-term investment growth through exposure to a diversified range of asset classes. The diversified nature of the Fund means that the Fund is expected to have less exposure than an equity-only fund to adverse equity market conditions. However, the Fund may perform less strongly than an equity-only fund in benign or positive market conditions.

Fund factsheet (PDF)
Management companyLegal & General
Management typeActive
Fund management charge *0.13%

Date
Fundpercentage growth
ABI – Mixed Investment 40-85% Shares (benchmark)percentage growth
12 Apr 2019
0 %
0 %
02 May 2019
0.34 %
0.56 %
22 May 2019
0.79 %
0.26 %
11 Jun 2019
1.97 %
1.2 %
01 Jul 2019
4.22 %
2.82 %
19 Jul 2019
5.12 %
3.82 %
08 Aug 2019
5.23 %
2.81 %
28 Aug 2019
5.17 %
2.32 %
17 Sep 2019
6.13 %
4.11 %
07 Oct 2019
6.35 %
3.08 %
25 Oct 2019
5.62 %
3.14 %
14 Nov 2019
5.49 %
4.12 %
04 Dec 2019
5.05 %
3.49 %
24 Dec 2019
7.63 %
7.19 %
13 Jan 2020
8.56 %
7.61 %
31 Jan 2020
7.91 %
6.27 %
20 Feb 2020
10.09 %
8.49 %
11 Mar 2020
0.57 %
-3.99 %
31 Mar 2020
-5.96 %
-9.78 %
20 Apr 2020
-2.25 %
-5.52 %
08 May 2020
-1.88 %
-4.2 %
28 May 2020
3.23 %
0.1 %
17 Jun 2020
5.02 %
1.54 %
07 Jul 2020
5.88 %
2.92 %
27 Jul 2020
6.05 %
3.06 %
14 Aug 2020
6.27 %
3.69 %
03 Sep 2020
7.25 %
4.03 %
23 Sep 2020
7.3 %
3.32 %
13 Oct 2020
8.31 %
5.36 %
02 Nov 2020
5.38 %
1.26 %
20 Nov 2020
11.06 %
8.36 %
10 Dec 2020
13.43 %
10.92 %
30 Dec 2020
13.46 %
11.97 %
19 Jan 2021
14.59 %
13.15 %
08 Feb 2021
14.81 %
13.07 %
26 Feb 2021
11.87 %
11.71 %
18 Mar 2021
13.46 %
13.27 %
07 Apr 2021
15.14 %
15 %
27 Apr 2021
16.46 %
16.83 %
17 May 2021
15.28 %
15.31 %
04 Jun 2021
17.12 %
17.13 %
24 Jun 2021
17.84 %
18.12 %
14 Jul 2021
18.92 %
19.63 %
03 Aug 2021
19.65 %
19.97 %
23 Aug 2021
20.26 %
20.62 %
10 Sep 2021
21.08 %
21.64 %
30 Sep 2021
19.69 %
20.48 %
20 Oct 2021
20.11 %
20.77 %
09 Nov 2021
23.01 %
24.01 %
29 Nov 2021
21.03 %
22.03 %
17 Dec 2021
22.1 %
22.89 %
06 Jan 2022
20.97 %
23.12 %
26 Jan 2022
18.11 %
18.48 %
15 Feb 2022
16.89 %
18.1 %
07 Mar 2022
14.76 %
13.56 %
25 Mar 2022
17.08 %
17.69 %
14 Apr 2022
16.36 %
17.11 %
04 May 2022
14.67 %
15.72 %
24 May 2022
12.86 %
13.59 %
13 Jun 2022
11.85 %
12.65 %
01 Jul 2022
9.67 %
10.41 %
21 Jul 2022
11.64 %
12.73 %
10 Aug 2022
14.72 %
15.56 %
30 Aug 2022
14.35 %
15.18 %
19 Sep 2022
12.2 %
13.2 %
07 Oct 2022
7.41 %
9.57 %
27 Oct 2022
6.64 %
8.77 %
16 Nov 2022
10.89 %
13.04 %
06 Dec 2022
11.2 %
13.24 %
26 Dec 2022
10.38 %
11.67 %
13 Jan 2023
14.19 %
15.4 %
02 Feb 2023
15.57 %
16.69 %
22 Feb 2023
12.62 %
15.97 %
14 Mar 2023
10.84 %
13.17 %
03 Apr 2023
12.98 %
14.8 %
21 Apr 2023
13.09 %
15.81 %
11 May 2023
12.43 %
14.74 %
31 May 2023
11.08 %
14.27 %
20 Jun 2023
12.18 %
15.08 %
10 Jul 2023
10.13 %
12.96 %
28 Jul 2023
13.75 %
16.44 %
17 Aug 2023
10.09 %
13.32 %
06 Sep 2023
11.87 %
15.06 %
26 Sep 2023
12.02 %
15.23 %
16 Oct 2023
10.83 %
14.55 %
03 Nov 2023
11.18 %
13.49 %
23 Nov 2023
13.1 %
16.15 %
13 Dec 2023
15.61 %
17.82 %
02 Jan 2024
18.58 %
20.69 %
22 Jan 2024
16.53 %
18.73 %
09 Feb 2024
17.55 %
21.05 %
29 Feb 2024
18.67 %
22.12 %
20 Mar 2024
20 %
23.67 %
09 Apr 2024
21.1 %
25.02 %
12 Apr 2024
21.16 %
25.02 %

my mate pointed me to prensioncraft but I kind of glazed over after 7-8 minutes!

Pick a couple of lost cost general funds (Global Tracker, Vanguard) in a low cost wrapper (eg ii) and get on with stuff.

https://markets.ft.com/data/funds/tearsheet/charts?s=GB00B5W2CB33:GBP

It’s certainly done better than 10% growth since 2017.

Looks like just under 40% growth since 2017 tome

I guess I may be interpreting the 9.3% growth wrong. Considering at day 1 in 2017 there was no money in it. The 9.3% is calculated on the total amount invested but of course that has accrued over 7 years.

You may well find some horrendous fees dragging down your performance!

A few years ago a colleague moved his pension into Chinese linked funds (available within the company pension scheme) as he saw the previous year they all went up 10-20%, they all went down 10-15% for a couple of years after that. Point being don’t go chasing high performing funds with your pension as they’re usually high risk to – but yeah you don’t want to be in a fund that’s consistently under-performing (unless it’s a very low risk fund with a lot of bond investments that you specifically selected for being ‘safe’ – that said bonds aren’t generally considered a good investment for most people).

Only bit to add, remember you can’t “buy history”.

AKA just because a fund/company/expert etc delivered growth previously, doesn’t mean it’s guaranteed for the future.

<quote>I guess I may be interpreting the 9.3% growth wrong. Considering at day 1 in 2017 there was no money in it. The 9.3% is calculated on the total amount invested but of course that has accrued over 7 years.<endquote>

Theres something weird going on then, because the unit price of the fund has increased by just under 40% since 1st jan 2017 until today – which wilst not amazing performance isnt really bad either, so your fees would have to be crazy high to give you only ~9% growth on your investment in the same period.

Are the fees an absolute amount (eg £10 per month rather than a percentage of the pension pot value) , and you have a relatively small amount invested in there?

you need to understand why your pot has only grown by ~9% when the fund itself has grown by ~40% – something doesnt add up.

Also , if it’s a company pension then there are employers contributions to take into account , plus tax relief.
Ie . Your fund . Let’s say it’s worth £100k. It might have only cost you £24k. Or £200 a month for ten years. The employer contribution and tax relief all add together with net income reinvestment and capital gains.
Now I know you feel it’s underperforming and it probably is, but you might not be able to move the funds to a low cost provider.
AJ Bell , Interactive Invester , Vanguard ang Hargreaves Lansdowne all offer low cost sipps.
You can stay invested in high risk assets for longer with the new draw down rules. In the old days you were pretty much conned into buying an annuity which gave you next ho nothing and took 30 years to return the investment and most gys died after 8 or9 .
Now you can defer almost indefinitely if you don’t need a lump sum to pay off the MTG or buy a Rover 75 brand new. So even if the market has dropped you can either wait , or take out a minute amount to live on.
This leaves the rest invested waiting for the market to pick up and hopefully getting divvys reinvestment.
This is also a great way to get a nice income which is taxable and to keep it under 40% tax
However none of this changes the amount you need to retire on if you want a holiday abroad , car , meals out. Or to retire early.
My plan is £440 a week split between pensions , part time work and rental income , from 58 to 66 then £440 week from state pension , rental income and sipp.
Which is nearly the same as I earn a week so effectively I aim to slow down in a few years with over £300k invested , no debt and work 2 or 3 days a week .

I think the hardest thing is working out “how much is enough” What will you actually spend in retirement is very hard to pin down.

The switch from Final salary schemes, to annuities and now DIY drawdown has moved all the decision making and planning onto us. It’s way too complicated and difficult for most people. As annuity rates have risen again, I think they may well become the main option for the majority.

I guess I may be interpreting the 9.3% growth wrong. Considering at day 1 in 2017 there was no money in it. The 9.3% is calculated on the total amount invested but of course that has accrued over 7 years.

most of your money hasn’t been in it for 7 years.

lets say you invest £1000 a year for 10 years, at a 10% rate of interest (aka growth in a pension fund). at the end of the 10 years you would have the £10,000 you invested, plus £5937 of growth. That does not mean that your growth rate was only ~6% – the growth is only earned on money you have in your account at that point in time (so for the first year you only get £100 growth, which is 10% of the £1000 you have in) – some of that is counteracted by the fact your growth is earning growth.

thats an extremely simplified example, but basically its really hard to separate the growth of the fund from the payments made in – you’d have to break down each payment in and the effective value of that payment today, and divide it by the amount of time its been in the fund, to work it out. Or just look at one of the fact sheets posted.

Fees are 0.13%

£200k fund. Approx £40/month fees.

My “advisor” says fees are low and fund is middle of the road returns.

I think 5lab has nailed the explanation

I still think it’s a dreadful fund!! Over that period my main vanilla global tracker has grown 80%

If you prefer the written word over YouTube videos, I can highly recommend the blog at Pyrford Financial Planning. Very similar concepts to what people like James Shack on YT talk about – cashflow planning for retirement income using software to model how it would work in practice by using the last 100+ years of market data (i.e. what are the best, worst and median outcomes if I’d done this at various points over the last century). That really helps cut through the nonsense of most pension calculators that just assume constant growth, and helps develop strategies to mitigate the ups & downs by drawing more in the good years and less in the bad years. This is a good blog post to start with, which goes through a worked example.

In my job I get a monthly salary and then an annual bonus which depends on company performance. I’m looking at using a similar model with my pension drawdown – a monthly “salary” to cover the basics plus a bit of fun, then an annual bonus which will vary according to how well the fund has done that year which will mostly determine how nice a holiday/car/bike I get. Few if any online calculators allow you to model this, but a good financial planner might just be able to.