The 2023 Pension Crash Explained (Why and what you need to do)

*Looking for help with Financial Planning?*

Videos to watch:

How to Sort Out Your Pensions TODAY and Retire Early

Picking Funds | The 3 Big Mistakes Everyone Makes

00:00 Intro
1:43 Who is responsible?
4:49 Default Funds
6:32 Fund Examples
9:57 Bond Expected Returns

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This channel is for education purposes only and does not constitute financial advice. Any opinions or assessments expressed are James’ own opinions or assessments, which are not affiliated with any third party. Any representations stated as facts or views based on such facts are relevant to circumstances applicable at the time of publication. This information should never be relied solely upon to make decisions, and James accepts no liability for any investment actions undertaken by viewers. Please seek regulated financial advice or an advisor if you require assistance.

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[clairewinchestermurray]

With bonds overpriced, gold overpriced, real estate overpriced, the only place I found wise to put money is the stock market because from my experience it’s paid off more than any other investment I’ve gotten into.

[Elizabethwells-qf]

Planning retirement has never been this confusing! First SVB, then Signature bank and now First republic, these are all the signs of yet another 2008 market crash and recession 2.0, so my question is do I still save in the United States dollar, or could this be a good time to buy stocks? So I’m left wondering what 2023 has in store for us investors, I’ve been sitting on over $745K equity from a home sale and I’m not sure where to go from here,

[simonhollis]

I've watched 100+ different finance experts, but James Shack is hands down my favourite. The analysis is well researched, unbiased and presented in a very digestible way. Respect!

[CameronFussner]

Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My parents both spent same number of years in the civil service, but my mom was investing through a wealth manager, and my dad through the 401k.

[jitparmar]

James – you’ve hit the nail on the head when you said “….it’s pretty nuts when you consider the financial literacy of the average person in the UK…”. If you're looking for financial advice from the average person, you're better off asking a goldfish. This is why your videos are so valuable. Thank You.👍

[jocar-]

Another excellent video James. Fortunately, i never went for the standard lifestyle option in my DC company pension since I wasnt keen on buying an annuity at retirement, so I went for self selected funds. This approach has served me well as I have recently been able to retire earlier than anticipated. Incredibly, whilst working the DC pension "advisor" told me that I was the only person in a relatively large company DC scheme not to be in the lifestyle option and to have my own choice of funds. I totally agree with trying to educate oneself financially and I started this process many years ago after a "fall-out" with my then financial advisor after years of very poor returns after which I realised that all they wanted was for them to make an income off my capital. I still have a lot to learn based on your videos, if only my financial advisor had years ago provided information as good as yourself !

[markwilliams]

I think it needs to be stated that if you buy quality (such as uk gilts) individual bonds they are actually a very safe bet providing you hold it to maturity as you will get back exactly what you paid plus the coupons . The issue with a lot of pension platforms is they are investing your money in bond funds where the bonds are constantly being bought and sold before they reach maturity, meaning you are subject to what’s happening in the market.

[stevegeek]

I took control of my company pension a couple of years ago and moved my money out of the default “safe” fund and into passive global equity fund, plus a money fund…saved me from losing tens of £000’s!

[peterhughes]

I'm in exactly the situation James is describing and now I need to decide whether I keep contributing to these funds in the hope they will recover or stop and leave them where they are and start an entirely new pension and hope this frozen one recovers in a few years, I contribute about £2.5k per month and my fund doesn't increase by that per month recently !

[adambritain]

This bloke is absolutely fascinating.
He’s giving great advice/commentary for absolutely no cost to YT watchers.

[dabbler]

The worse thing is the pensions advisers still get massive money

[deanrobertnoble]

After work set up our salary sacrifice scheme i tried to find out what they actually invest in. It is very difficult and almost impossible to manage other than ‘risky’ or ‘less risky’. In the end, i ended up just annually doing a partial transfer out to my sipp to give me control over what my money gets invested in.

Pension companies need to be more transparent with such things.

[paulbrown]

If i'm invested in a fund i woulds expect the fund manager to be adjusting the ratio of bonds to stocks on my behalf since he/she is the expert. I should not have this volatility due to bond prices dropping. They should have sold out of these bonds, the drop was expected surely as rates were going up.

[kevthedynamo]

Thank you very much Gordon Brown for getting rid of the final salary pensions! Yes, Labour is definitely for the working man!!

[thegrumpydeveloper]

It’s awful that the “balanced” portfolio supposedly contains such a high bond quantity. It’s been clear that basically negative real interest rates were not sustainable.

[frederickwoof]

Thanks, thats answered my thoughts about the Vanguard lifestrategy 40. I retired last year and being roughly half my portfolio, I've not touched it. Jokingly before covid I said to a work colleague that all this planning of pension i bet there'll be a disaster or a third world war. 😢

[GoogleAccount]

James could you please make a video about what is happening with the money in pension when you die early or your designated people die early. How much money are left in the found and wouldn't these be enough to cover someone elses retirement, taking the proportion between working age and retirees numbers drop. What is the point in spending all of this time and attention if we will work till 70 at which point most of us will be incapacitated if not physically then mentally. According to predictions 3rd of us will have dementia and no control over how our pension is used. Hours in learning unpredictable stocks and tons of money on stock advisors. It looks grim and depressing. Instead of building just society when everyone can depend on one another invest in retirement dependant on speculation. By default it is not sustainable.

[nunwarthead]

Maybe you could do something on creating your own Bond Ladder? I think this gives you more control than Bond funds since you have the option of holding the Bonds to maturity...unlike the Bond funds that have to constantly buy/sell Bonds, sometimes at disadvantageous prices. At least you know what you are getting with a Bond Ladder and so you can plan your future income better. You can also lock in the higher Bond yields at the moment. I think a Bond Ladder and a Global Tracker is probably just as good, and probably cheaper than a LifeStyle fund portfolio. It is also easier to rebalance your portfolio to a different Bond/Stocks ratio if your appetite for risk changes.

[stephen]

Please correct me if I am wrong but I think you should point out that bond holdings are priced on their current "sell value". That notional value is used to price the holding, and very reasonable too. However if you don't exit you don't actually lose any money (unless you are invested in junk bonds which might fail).

[Joe-lbqn]

My company, partially at the urging from me and the few outliers who actually took note of their pensions instigated a change / consult about stopping the lifestyle option because it was clear that annuity rates were falling, many people would not be buying one or if so ata much later age and so people were being switched into cash something like 10-15 years before they *might* buy an annuity. I stayed fully invested into retirement I figure I may have another 20 years and then my kids will get what's left so going to cash makes no sense. Maybe when I'm a fair bit older I might buy an annuity with some of my investments. I'm lucky (and planned well enough) that I can ride out falls without an issue.