Flexiplan lost £ 400

[Stef]

I plan to retire in 4 years time and have been saving through Flexiplan for the lump sum. I received my yearly statement recently which tells you how much you have paid in over the last 12 months. My investment lost £400 over the last 12 months. I know you can win and lose when you start investing but I was a little shocked at how poor my investment done this last 12 months. I ain't very good at switching to various funds so have kept mine in the Lifestyle option. With the thought of retiring in 4 years all I really want is to get what I put in. I would hate to loose £400 for the next 4 years. With this in mind it has made me question if the Flexiplan is really the best thing for me to save for my lump sum. Maybe I should just start saving over my last 4 years into a savings account. This would guarantee I get what I put in. My priority over the next 4 years is to stop the risk and settle for getting what I pay in. Hopefully someone can give me a bit of advice or ideas on the best move to make to cut out the risk and just settling for coming out with what I put in. Chasing a profit is not a priority at this late stage with 4 years to go. Thanks for any advice.

[Gary55]

If you are looking for the best savings rates I rely on Martin Lewis's Money Saving Expert site. He doesn't cover stock market side but that's not what you're looking for. He has charts with pros and cons of the best deals .

[mrcurve]

you may be better off having a look on the money4life website, for todays values, quite a few investments would have lost money last year though, and improved this year, investing always has some risk it would be painful for it to drop just before you got it, on the plus side if you were using salery sacrafice to pay in, every £1 would have cost .68p so you would have been down £272

You can always move all your money into cash, the website allows you to move any investment\savings about and split it up too.

To change what happens to your ongiong payments though

https://www.royalmailpensionplan.co.uk/ ... ation_.pdf


INFO on how the funds have done
https://digital.feprecisionplus.com/cor ... ory=2rmp62

October seems to have been a very bad time for some funds and the early July for a few days.

[Wullie10]

The AVCs were supposed to move into " safe " government bonds as retirement age gets closer. Unfortunately government bonds are just government debt and that will just become huge over the next few decades. My £900 " bonus " will be lost when I receive my pension shortly . Its not the end of the world , I'll just have to take what's on offer.

[RobertT]

Some of these points have already been mentioned, but here's what you need to consider:

1. The first thing you do is put the £400 into some context. What percentage is that of your total Flexiplan pot? £400 of £2,000 is a lot, but only a small amount of £40,000!

2. How much have you actually put in yourself up to this point? Bearing in mind with tax relief and PSE, each £1 only actually costs you 68p. The tax man pays the rest.

3. Any money you pay into a savings account will come out of your net pay, so you'll already have paid income tax and NIC's on it. Pension savings via RM are paid before tax is deducted.

4. The Lifestyle option automatically switches your money into traditionally safer places(bond/gilts) as you near your chosen retirement age. Those investments haven't performed well recently and that's been well documented.

5. Take a look at the funds at your disposal, ultimately only you can decide whether to switch and to which one/s. Cash would be the obvious choice, although it's not the same as a savings account and does have some risk.

Personally, I would say Flexiplan is the correct choice due to the tax breaks, which you won't get anywhere else, it equates to a 47% increase on your money straight away! Your choice of investment fund/s needs to be looked at.

[Stef]

Thanks everyone for your helpful advice. I will take my time and think things through before making any decisions. Many thanks for all your help. cheers

[Stef]

Just a wee update of what i finally did in the end. It annoyed me that this year i made a loss in what i paid into the Flexiplan. At first i cancelled my payments into Flexiplan and decided to save this money in the credit union with the view of transferring into a higher interest account at a later stage. What a shock i got when i looked at my wage slip the very first week. The tax deductions was higher than i anticipated. I knew immediately i had made a mistake and started the process to apply to start my Flexiplan again. This week was the restart of me Paying into the Flexiplan again and to my delight my take home pay is £20 more than when i was saving it all in the credit union. Now i realise what people were saying when they say for every pound you pay into Flexiplan it costs you 68 pence. Cheers for everone who left a comment.

[NWpostie]

I've selected growth I'm equally aware if the risk it could down or up, I choose this strategy to max hopefully any gains generally the market long term usually ends up on a higher trend.

It's down to your attitude toward risk.

[mr hil.]

I have been paying into the AVCs for 5 years now and a quick check shows my current gross value is about 25% more than my total contributions

A very crude calculation but it gives me peace of mind to know that market fluctuations over the longer term have not reduced my savings

[heapsy]

Despite all the current issues, the markets still beat cash returns this year.