Cash Balance Fund Drop

[royals]

I had a pension qoute over 12 months ago and the cash balance fund was just over £30k. Out of interest 12 months later i ordered another qoute to see hopefully some growth but it has now dropped to £28500. Very dissapointing

[NWpostie]

The stock market can go up or down, generally the market trend is usually upward with the dips, you need to have long term growth strategy not short term get rich quick and a get poor just as quickly,

[RobertT]

The whole point of the DBCBS is that it doesn't go down.
The contributions from both yourself and RM are guaranteed, as are the annual bonuses once they've been added.
With the caveat that if you take it before age 65, it may be reduced for early payment.

My understanding is the RMPP didn't apply a reduction until a year or two ago. But now they do!

So presumably your quote is for taking it before 65?

Have a play with the calculator on the RMPP website, to see how much the DBCBS reduces if taken at different ages.

[reedy]

Hi Robert yes the figures are for taking the pension early.The first figure was for age 55 and the second figure was for 56 so i expected a possible 5% rise in the figure even if the value had no increase. Ive been investing for many years and realise markets go down as well as up but with markets at a high currently i expected the figure to be better than it was

[RobertT]

Increases to the DBCBS are added each April and aim to at least match CPI in the previous September. 2025's increase was 3.7%.

The only way it's value will go down is due to taking it before 65.

Going by the RMPP calculator, taking it 9 years early would see a reduction of about 12.30%.

Therefore, I suspect your first quote was before they decided to apply the early payment reduction, which has only been in place for a fairly short time.
Hence why it's value is lower at age 56 and 9 years early, compared to 55 and 10.

[Wullie10]

I always thought the quote they send you for early retirement did not include the reduction. They just state the quote given may be reduced for taking it early but they don't give a final figure thats the guaranteed amount.