Yet another depressing pension statement

Why oh why do these pension statements get more annoying to read each year.

Yet again the pension forecast is less than last year as they have now dropped the growth forecast <! again !>. Each year the annual pension forecast falls even though the pension fund value increases. This is one of my old AVC schemes which just becomes a joke. They have even put an example illustration of a negative growth rate.

An ex-work colleague was telling me to get a valuation on my old work DB scheme (final salary one). She is looking at taking the money out of the scheme because the number is so huge….. Well, I’m happy to keep mine as a DB scheme as at least I know at the moment what my pension will be when I reach pension age. She has a hubby who probably has a DB scheme too so when shared she may find that cashing in hers may be worth it as part of a couples financial plan. As a singleton, I don’t have that option so have to rely on my own schemes to fund my retirement, if I actually reach it.

My current plan is to combine all my separate DC pots nearer retirement age and look at a draw down option to supplement the DB scheme + state pension. At the moment, I have consolidated them down to a manageable number of accounts but still retain some risk mitigation. i.e. not have all my eggs in one basket.

I will continue to plough money in there and take the benefit of tax relief and take the max I can from my employer for their scheme which is 5%.



2 thoughts on “Yet another depressing pension statement

  1. That pension forecast doesn’t make sense, unless they have a crystal ball and know something you don’t that will cause negative growth rate!

    I too won’t be cashing in my old work DB pension either – it’s just one less aspect of my pension for me to think about. One of my ex-colleagues had his transferred to a SIPP and it was a significant value by all accounts – think he’ll be blowing it at 55 on fast cars and boozy holidays!

    Anyway, keep plugging away and all the best for 2018!

  2. Keep any DB schemes; they’re like gold dust now. However, you should look at any old DC pensions, particularly AVCs, with a view to moving them into a SIPP as soon as you can – don’t wait until you’re nearing retirement age, as they’re probably haemorrhaging money in fees. Most AVCs are on old fee scales (the change to capping fees was not retrospective), so it’s likely you’re paying somewhere in the region of 1.5% in fees for those, whereas you could have a SIPP with <0.5%. Even though you mention you've consolidated some of them, it's likely you could still make considerable savings by making further changes (which doesn't necessarily mean having fewer accounts, but just getting better ones).

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