Pension stuff, how's it all looking ? HAve you prepared ?

[Horse]

I'm having to give some thought as to whether to carry on piling the money into my pension or reign it in. I don't actually know how well it's doing or not. I put something stupid like 26% into it, so I really ought to be having a look.

Having assumed that everything would be ok (see above), the two lessons are:

1. Take a more active role, even if only maintaining awareness. That I didn't do, only looked at headline £figures

2. Diversify how/where it's spread - no single basket egg distribution. A final salary scheme allowed me some stability.

[JackyJoll]

I'm having to give some thought as to whether to carry on piling the money into my pension or reign it in. I don't actually know how well it's doing or not. I put something stupid like 26% into it, so I really ought to be having a look.

26% may not be stupid, if it’s not making you poor just now.

There are only so many things you can do with money. Putting it into pension funds is certainly not the silliest.

[Potter]

FWIW my market’s portfolios and pensions are all down on average about 15%. I knew it was a risk though, so I can wait and use other funds until (hopefully) they pick up.

I'm in the same boat as everyone else,my pensions are down & I had a low risk ISA that was making nothing.
I got the ISA swapped to another fund & now it's making money.When going through this process the FA showed me a graph of my under performing ISA & there's 3 dips in it's value,1st dip Brexit,2nd dip Putin invading Ukraine,3rd dip Liz Truss.I'm not sure how the markets factor in a Liz Truss but at least that problem's solved,the other two issues might take a while...

I don't like using business/finance speak, but they were corrections rather than calamities.
The market was vastly overpriced and it was waiting for anything to make it stop and think, an actual calamity would collapse it properly because it really is mostly just smoke and mirrors, so those issues were enough of an excuse to develop hiccups and that's the dips.

People try and make political gain out of it, but the only thing that changed was the psychology of the market, it wasn't actual money disappearing even if it seems like it, the money never existed and it was just numbers and ideas being moved around to make it look like it did.

Think of it like a giant Ponzi scheme, as long as everyone keeps their pretend money in there then it's ok, but if everyone tries to take it out then they'll quickly find out that it doesn't really exist. That's why Liz Truss was able to miraculously make billions disappear in 24hrs, it never existed in the first place.

[Mr. Dazzle]

And in the same vein, it's easy to look at your pension funds and say "I've lost £££", but, well, you haven't. You've only lost that money if and when you either withdraw it or transfer to a different fund.

Up until then it's a semi abstract number. The worst thing you can do is make a rushed decision when you see the values going down.

Same goes for gains of course!

[Count Steer]

And in the same vein, it's easy to look at your pension funds and say "I've lost £££", but, well, you haven't. You've only lost that money if and when you either withdraw it or transfer to a different fund.

Up until then it's a semi abstract number. The worst thing you can do is make a rushed decision when you see the values going down.

Same goes for gains of course!

It feels real enough when you're about to transfer all your 'safe' funds into a SIPP or draw down some of the 'tax free' allowance and some dunderheads knock £xx,000 off the value.

Oh, I forgot, these things are never the politician's fault it's always someone/thing else (BoE, Civil Service, EU, Russia, Unions, adverse weather, politicians from 20 or 30 years ago, mice, alignment of the planets - I should have tried all those when a project ran over budget...).

[Horse]

You've only lost that money if and when you either withdraw it or transfer to a different fund.

Up until then it's a semi abstract number.

Indeed. Two consecutive sets of annual statements, with an umpteen thousand pounds difference, second set all being lower.

And that second set was at the point where I had expected to draw that money out and use it to provide more imaginary money, to spend.

Forgive me if the 'it's not real' explanation rankles

[JackyJoll]

You've only lost that money if and when you either withdraw it or transfer to a different fund.

Up until then it's a semi abstract number.

Indeed. Two consecutive sets of annual statements, with an umpteen thousand pounds difference, second set all being lower.

And that second set was at the point where I had expected to draw that money out and use it to provide more imaginary money, to spend.

Forgive me if the 'it's not real' explanation rankles

The problem is you being the wrong age.

[Mr. Dazzle]

Same thing buggered me first time I bought a house

[Pirahna]

Same thing buggered me first time I bought a house

Potter with the bumming hat?

[Potter]

Forgive me if the 'it's not real' explanation rankles

I'm not being condescending, I'm writing this because I know some people really do think that their money is safely tucked away in a vault, they don't know what actually happens to it after they hand it over.

I could go into it in detail with a long post but people won't read it, and in most instances even those that think they know, usually don't actually know.

Only ever gamble with money that you are fully prepared to lose, I mean properly, not just ticking the box.
Putting it into investments and then being emotional when you lose it means that the part of your brain that cares didn't get the memo.

Investment banking, financial markets and corporate accounting is a heartless theoretical exercise of balancing numbers.
I think a very significant portion of all this stuff is dishonest and often moral fraud even if it's not criminal fraud, it relies on a lack of understanding from the people feeding it.

[Count Steer]

Only ever gamble with money that you are fully prepared to lose, I mean properly, not just ticking the box.
Putting it into investments and then being emotional when you lose it means that the part of your brain that cares didn't get the memo.

'Money' is conceptual/a construct and a gamble given that it can drop in value (quite rapidly - eg Turkey, Germany at certain periods). You could stash it under the bed and still lose. Invest it in a house, gold bars etc and still lose. In the end the only true value items are food, clothing and shelter.

Mainly you have to shrug and move on but it rankles when you lose money/value through other individual's sheer stupidity - when they're supposed to know what they're doing.

[Potter]

Indeed, it’s all a game and a bit of a gamble.

And I get it, there needs to be a system, a sheep/wolves system at least keeps some sort of order and it’s better than total chaos. Obviously there needs to be many more sheep than wolves, the sheep need to be kept ignorantly grazing and the wolves need to feed, but the wolves are properly taking the piss now.

[Cousin Jack]

Indeed, it’s all a game and a bit of a gamble.

And I get it, there needs to be a system, a sheep/wolves system at least keeps some sort of order and it’s better than total chaos. Obviously there needs to be many more sheep than wolves, the sheep need to be kept ignorantly grazing and the wolves need to feed, but the wolves are properly taking the piss now.

And it is the wolves who set the rules and police the system, so don't expect radical change any time soon.

[Horse]

Investment banking, financial markets and corporate accounting is a heartless theoretical exercise of balancing numbers.
I think a very significant portion of all this stuff is dishonest and often moral fraud even if it's not criminal fraud, it relies on a lack of understanding from the people feeding it.

Plenty to support that.

Was it 'Equitable Life' that went down the pan, taking many pension pots with it? And the recent Norton example of serious fraud. Then, of course, the under-funding of pensions because those in charge somehow overlooked the rise in age that pensioners were achieving.

I'm not being condescending, I'm writing this because I know some people really do think that their money is safely tucked away in a vault, they don't know what actually happens to it after they hand it over.
....
Only ever gamble with money that you are fully prepared to lose, I mean properly, not just ticking the box.
Putting it into investments and then being emotional when you lose it means that the part of your brain that cares didn't get the memo.

FWIW, i have a final salary scheme, two other pension savings schemes, and an independent AVC. All with different providers. (Separate from any other savings and investments) Filly has her own, different, provision.

I had hoped and expected that a spread would be sufficient. However, see my reply to Ant earlier.

Of course, after some of the earlier episodes, there is now some government protection of investments. But your principle applies to every situation where you hand over money to someone else, be it a loan to a mate (done that, many 10s thousands, got it back), peer-to-peer lending, shares purchases, or more reliable destinations like banks.

But your final line is really only partly correct. I don't think that even all well-informed and 'open-eyed' people would be totally dispassionate when presented with a substantial loss in money that they will need for their future.

As it happens, even if the current losses are maintained, we're not going to be badly affected. It would just remove a bit of comfort and buffer.

Also AIH, and coincidentally, I'm likely to be going back to work part-time for a while. Won't earn enough to replace the lost imaginary money, but will help.

[JackyJoll]

Indeed, it’s all a game and a bit of a gamble.

And I get it, there needs to be a system, a sheep/wolves system at least keeps some sort of order and it’s better than total chaos. Obviously there needs to be many more sheep than wolves, the sheep need to be kept ignorantly grazing and the wolves need to feed, but the wolves are properly taking the piss now.

Is it time for this one?

[Dodgy69]

Banks are offering better rates on savings, so you might expect investment experts to do better with our money, but it seems they can't and when you're paying them for there so-called expertise it's a bit of a bummer I reckon.

[Horse]

when you're paying them for there so-called expertise it's a bit of a bummer I reckon.

"Oh. Didn't see that coming. It was ok previously. Such a lot lower. What a shame, never mind ... That will be £xxx, please."

[Potter]

A+B+C=Z (where Z is fixed) means that A,B or C must change.
This is where you must lose some of your money so that someone else can make some.

A+B+C=Z (where Z is not fixed) means that they can print money or just make up a number.
This is where everyone could win, or someone, more than one, or everyone can lose.
(Everyone winning means eventual inflation so everyone proportionally loses)

There is no scenario where everyone wins without a downside somewhere.

[Horse]

Which hints at the potential longer-term outcomes from the government's 'levelling up' intentions.

For an individual's personal finance, the expectation ('value of investments may go ... etc.) is that a professional will achieve better outcomes than an amateur.

Of course, when there is a fundamental, swift, change as happened last year, where previously 'safe' lower-return investments fell dramatically, then that skewed the equation. I don't know which investments rose at the other end of the seesaw to balance Z.

[Ant]

Forgive me if the 'it's not real' explanation rankles

I'm not being condescending, I'm writing this because I know some people really do think that their money is safely tucked away in a vault, they don't know what actually happens to it after they hand it over.

I could go into it in detail with a long post but people won't read it, and in most instances even those that think they know, usually don't actually know.

Only ever gamble with money that you are fully prepared to lose, I mean properly, not just ticking the box.
Putting it into investments and then being emotional when you lose it means that the part of your brain that cares didn't get the memo.

Investment banking, financial markets and corporate accounting is a heartless theoretical exercise of balancing numbers.
I think a very significant portion of all this stuff is dishonest and often moral fraud even if it's not criminal fraud, it relies on a lack of understanding from the people feeding it.

Talking of losing money, I wonder how many remainers knew that a vote to remain was a vote to let the EU dip into your bank accounts to prop up the failing EU currency, like they did during the last crash. There was a limit in your account to which anything above, the EU could and did take from people.