Working out pension growth rate

[thunderlizard]

Contreras, that is fantastic!
And whaddayaknow, it's the mythical 7% after all!

Huge thanks,
tl

[Antman]

Some clients require junk like this.

I have to say that any IT contractor who couldn't produce a faked up low-res passport image, probably can't get a contract anyway.

There's N security measures in passports to make it so that a scan of them doesn't look at all realistic with the effect that even if you care, rather than are box ticking, it would not be easy to spot a fake.

For a non-trivial cash withdrawal Barclays demanded proof of ID from me, refusing to accept my credit and debit cards as sufficient.

So I gave them my business card, which they happily accepted. Given I have the damned things printed in batches of 1,000, my card is not hard to obtain, nor indeed to fake.

This and the war and peace effort the other day....

[Dominic Connor]

Just arse covering

Some clients require junk like this.

I have to say that any IT contractor who couldn't produce a faked up low-res passport image, probably can't get a contract anyway.

There's N security measures in passports to make it so that a scan of them doesn't look at all realistic with the effect that even if you care, rather than are box ticking, it would not be easy to spot a fake.

For a non-trivial cash withdrawal Barclays demanded proof of ID from me, refusing to accept my credit and debit cards as sufficient.

So I gave them my business card, which they happily accepted. Given I have the damned things printed in batches of 1,000, my card is not hard to obtain, nor indeed to fake.

[Dominic Connor]

Depends

A lot depends upon what your pension is invested in and you also need to factor in inflation and taxation.

What are you invested in and what is your investment horizon ?

[Contreras]

I've been paying into my pension monthly for 8 years and would like to work out what the investment growth rate has been. I'm sure I've done it wrong, as I came up with an answer of 10% but I'm sure that's too high.

I know
(1) how much i've paid in every month since I started
(2) the actual valuation in March every year

The spreadsheet function XIRR() will do this for you. Using a list of payments and the final valuation.

Assuming initial contributions of £200/mo and increasing by £10 every 3 months, then a valuation of £38k after 8 years would equate to 10% p.a.

Date          Description     Amount	
30/04/2005    Payment         £200.00	
31/05/2005    Payment         £200.00	
30/06/2005    Payment         £200.00	
31/07/2005    Payment         £200.00	
31/08/2005    Payment         £200.00	
30/09/2005    Payment         £200.00	
31/10/2005    Payment         £210.00	
30/11/2005    Payment         £210.00	
.
.
31/08/2012    Payment         £340.00	
30/09/2012    Payment         £340.00	
31/10/2012    Payment         £350.00	
30/11/2012    Payment         £350.00	
31/12/2012    Payment         £350.00	
31/01/2013    Payment         £350.00	
28/02/2013    Payment         £350.00	
31/03/2013    Payment         £350.00	
31/03/2013    Valuation   -£38,000.00

  =XIRR(C2:C98,A2:A98)        9.99%

[SimonMac]

Its pretty much what I do, but I have a fancy spreadsheet that does it for you.

[thunderlizard]

I've been paying into my pension monthly for 8 years and would like to work out what the investment growth rate has been. I'm sure I've done it wrong, as I came up with an answer of 10% but I'm sure that's too high.

I know
(1) how much i've paid in every month since I started
(2) the actual valuation in March every year

My steps were:
for every year:
(1) (current year's valuation) - (current year's contributions) - (previous year's valuation) = (investment growth amount)
(2) (investment growth amount) / (previous year's valuation) = (investment growth rate)
then
(3) take an average of all the growth rates worked out in (2)

You will probably laugh at my step (3) - it feels slapdash even to me.

But there must be a more correct way of doing it based only on knowing the dates and amounts of all the contributions, and the latest valuation?

Of course, none of the online calculators on pension company websites are any help. They are more interested in calculating what the retirement income I'll get based on their mythical 7%.
Thanks in advance,
tl