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How can I compare my pension's performance against competitors?

Danny | London| 30/05/2019 | 1

  • Private Pension
  • Pension

Danny's question in full

I saw an ad in the Evening Standard - 'In Charge Not Overcharged' - which prompted me to contact you to ask how I can see how my Aviva SIPP pension is performing against the competition. I'm 51. The fund value is £161K and it was opened a year ago. Appreciate any tips. Danny

Holly Mackay's Response

First, it's great to see that you spotted our Best Buy logo, on Interactive Investor's 'In Charge Not Overcharged' ad in the Evening Standard!

Welcome to our site!

 

Now this is a tricky question to answer, because I don't know exactly what's in your SIPP.

I did look at the charges for the Aviva Pension which you can buy directly online, and the charges start at 0.4% for administration and tier down.

That's that's pretty reasonable, and in line with the market average.

You ask about performance - it's hard to know because I don't know what funds they've actually invested in, or what investments are sitting inside your SIPP.

However, here are just a few things you can do, just to get a sense check of how it's doing:

  1. Look at what's in your fund. What you're looking for is the percentage of your fund or your pension, that they've invested in shares or equities. It might be 60%, it could be 100%, or it could be 20%. Try and work that out.
  2. See how similar pensions have done. As a proxy for fund performance, go and look at the Vanguard Lifestrategy range which is a low-cost fund. Try to map the percentage you've got in shares or equities to their option, and just see how they've done. This is of course not a perfect science at all, but if you can see that the Vanguard blended fund with 60% in shares has returned 10%, and your Aviva option with the same blend has returned 1%, well then you've got some questions to ask. It's not a perfect science, it's crude but I'm trying to help you with some rough and ready reckoners.
  3. Take a look at the FTSE. The other thing I do, is just look at what the FTSE 100 has done over the last year. It's down - global stock markets in general, are lower than they were. So if your fund is invested in global shares and it's down a bit, then this is entirely in line with what I'd expect.

When you're looking at performance, the thing you've got to work out, is what's the split between bonds and shares.

Have a look at a few other investments that have got a similar split, and just check you're not out of line. As long as things haven't fallen off a cliff over the last year, you should be fine. Aviva is a good, solid, reputable household name. It's unlikely that you're paying way above the odds.

As for performance, check out similar examples with a similar split, and just check your performance is around there or thereabouts.

If it's not, you've got some questions to be asking.

 

 

Just be aware...

We are not regulated to give personal financial advice - This isn’t full-fat regulated financial advice. Boring Money is a publisher and not regulated by the FCA. 

This means we can't help with specific personal circumstances or recommend specific investment products. It also basically means that if we say something daft, you have no recourse to come back and complain.

We’re only allowed to give you a steer or share an opinion or tell you the facts - That said, we promise that our answer to you is an independent unbiased perspective with no commercial gain to make. If you need regulated financial advice, you can find a good adviser via sites such as Unbiased & Vouchedfor.

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Holly Mackay

Founder and MD of Boring Money, Holly Mackay has been working in the investments space since 1998. She read Modern Languages at Oxford, with a special focus on Mediaeval French which was deeply interesting and arguably utterly useless.

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