ARCHIVE - Present and Future value on money purchase pensions **Voyant Adviser, UK**

Q. On the advanced setting for money purchase what is the difference on the growth setting between todays and future growth


A. There is really very little use for the Present / Future Value setting in the context of money purchases. Its use is much more straightforward in the context of future purchases or expenses.

For a money purchase the Present / Future Value setting would only come into play if you were to Step Up / Step Down contributions.

- Should the future increase or decrease (step) in contributions be in today's terms and therefore be inflated by the time you step them up or down (Present Value)?

- Or should the future stepped amount of the contribution be exactly as entered without factoring for inflation (Future Value)?

In most cases I think the latter option would be what you are after if you ever need to step contributions