I will let you into a secret. Every morning I switch on my pooter and log on to FT. com (see above).
I look at the little icons at the top to see if they are red or green.
If they are red, I run away and find out the cricket score (India 177-7). If they are green I check the S&P 500 icon – if it’s green I go to myaccount.landg.com and find out how much my pension pot has gone up since the day before.
This, I believe, is what is called “pension engagement”.
On a typical day, I will lose or win a multiple of my earnings on this pension pot lottery. That’s because I’ve saved all my life and have almost all my pots in one place.
I have learned not to cry when I lose a couple of thousand quid and not to crow when I win some. It’s all a gamble, totally out of my control.
This is no way for me to plan for retirement. It shows the total lottery that pensions have become. Do people have the first clue what has happened to make their pot go up or down, have they any idea how much they’ve spent that day on charges (clue it is a lot more than I spend on shopping and about what I’m spending on heating)
I can make these informed observations with some sanguinity because
- I am still working
- I have a positive bank balance
- I have a decent income from Zpen – my defined benefit pension scheme.
- In “only” five years , I will be drawing my full state pension (apart from the bit that Zpen is paying me)
I could of course have given my money to a financial adviser to look after. I suspect that the advice would cost me around £500 per month and the extra fees for a wealth management service about £1000 per month on top of that. I would however then have the benefit of a new “portal” where I could see all my wealth – like I get from MoneyHub (for free).
I’m not sure that the holistic portal is worth the extra and whether an IFA would make my money go up more and down less, I have no way of knowing.
But what I am absolutely sure of, is that as soon as I stop working – that big capital reservoir with L&G is going to be split, with a chunk of it going to pay off the mortgage and a chunk going to an occupational pension scheme that I know of that exchanges pots like mine for scheme pensions. That is so long as the pension they promise me is better than the best annuity I can get from Retirement Line.
I say this with some certainty because I have no intention of getting a dodgy ticker turning my pooter on to see if the icons on the top of the FT.com homepage are green or red.
I am instead going to spend my time in retirement reviewing my shopping from Waitrose
Holy mother of God , I am being asked to write a review of a 60p Red Pepper I bought in @waitrose this week! 82 people already have – is this my future in retirement? pic.twitter.com/F05Dms7dxj
— Henry Tapper (@henryhtapper) February 24, 2024
Henry – You can get 1Kg of mixed peppers for £1.89 this week at Lidl.
In pensions we are always comparing apples to pears. It is really much the same as to whether it is better to buy a pack of six mixed items or whether to focus on a single targeted purchase to return later to buy again possibly to your disadvantage.
I am like you, except I review my pension pots last thing at night and I never lose sleep as a result. Mind you I don’t use default funds and select my own portfolio (mainly geographic/sector specific index tracker equity funds) and rebalance monthly. As someone now well established into their 70s I still have no ideal of when I will need to generate income from the pots as I am already in receipt of State Pension and an old DB pension (albeit pre 1997 bought out on a PPF plus a very little basis) plus no mortgage or next generation commitments. I therefore pay more attention to my “expression of wish” forms than IGC reports.
I do therefore feel like Scrooge in using my online access to check the value of my pension pots.
Does on-line access merely provide game playing entertainment rather than real utility, and is that pension engagement?
I should perhaps add that I do expect to need to draw on my pension pots at some time during the remainder of my life just not sure when.
I have just received notification that the already eye-watering high care costs (more than 50% above the maximum DB pension with a £1M lifetime allowance) for a family member for whom I have Power of Attorney will be going up a further 8.75% from the 1st April
Neither you nor Pensions oldie bear any resemblance to the type of situation the average retiring or soon to be retiring individual finds themselves in. The vast majority of people know very little about pensions, investments, or long term financial planning. And the vast majority of people in retirement are unable to generate even the PLSA moderate level of income from their assets and pensions. And being honest, no matter how much they engage with their pension provisions, they just don’t have enough income and capital to live a lifestyle they might want. Until the terrible inequality in society is rebalanced most people would probably consider it unproductive to fully engage.