FSAVC.....Transfer Value Ripoff !!!!

purch · 20 January 2007 at 6:26PM

I set up a FSAVC with Allied Dunbar in 1990 ( I was 29 )....making 3 payments into the scheme in 1990,1991 and 1993 totalling about 39K. The initial retirement date set was 55.

The fund is now valued at about 97K but the transfer value on it is only around 75K. :eek:

I am only allowed a very limited choice of ex-Dunbar funds to invest in, and charges are obviously high.

My question is.......should I consider transferring the pension into better performing funds.......or am I better served leaving it where it is ??

I also have a SIPP with Hargreaves Lansdown valued at about 60K and my PR's are in a PP with Scot Widows

Any ideas are welcome

dunstonh · 20 January 2007 at 7:51PM

I am only allowed a very limited choice of ex-Dunbar funds to invest in, and charges are obviously high.

AD tended to have higher initial charges but lower annual management charges so dont assume they are high. That said, I have seen some with low and some with high so its best not to assume anything with their contract. My guess is that they had different versions over the years.

My question is.......should I consider transferring the pension into better performing funds.......or am I better served leaving it where it is ??

Depends on the figures. A TVAS calculation would see what the difference is and you can decide then based on facts and not guess work.

It also depends on what funds are available.

EdInvestor · 21 January 2007 at 10:45AM

How close are you to 55? If it's a long way off I would bite the bullet and move it to your SIPP, you should be able to make back the penalty in 3 years even if you only get average returns.

If it's quite near, might be worth staying to collect the lot penalty free.

purch · 21 January 2007 at 7:33PM

I'm 46...

I think the AMC on the Allied Dunbar FSAVC was/is 3%

The Balanced Managed Fund that it's mainly invested in has performed Ok amongst similar Pension Funds over the last 10 yrs ( 8th out of 72 )

EdInvestor · 21 January 2007 at 7:44PM

Ouch 3% :mad:

I would move it to the SIPP.

dunstonh · 21 January 2007 at 11:20PM

I doubt 3% is the amc. That sounds more like the bid/offer spread or the capital units amc. The last one I saw had a 0.75% amc.

purch · 22 January 2007 at 12:57AM

After that I have dug out the product particulars book for the plan....

'To help meet the day to day expenses of running your plan the company makes an expense deduction which automatically increases in subsequent years in light of changes in the average earnings index'

'An indexed policy charge will apply to the plan...Investment benefits and Death in service benefits £3.88per month'

'A Management Charge of 3/4 % pa is taken out of the fund but, in respect of Accumulation Units this charge is re-invested in further Accumulation Units for the Benefit of the Plan'

'Allied Dunbar retains a special annual charge of 3 1/2% of the value of Capital Units and accumulates the rest of the income (after management charges) within the fund'

'Every month, Allied Dunbar makes deductions by cashing in units to cover the cost of the Full return of Fund benefit and Death in Service sum assured'

.......as clear as mud !!!!!

By the way currently the fund is made up of 57% Accumulation Units and 43% Capital Units....

I still can't see how they can justify nicking over 20 grand off me if I dare to transfer MY PENSION to another providor !!!!!

dunstonh · 22 January 2007 at 10:14AM

Multi-charged contracts are never easy and thankfully they began to disappear before 2001 and most contracts nowadays are mono charged or much simpler.

The pension you have is normal for that era. We don't drive round in Ford Cortinas any more and you have an Austin Allegro of a pension!

defender_of_the_weak · 22 January 2007 at 11:07AM

That looks way too many accumulation units. Was your plan set up as three single premiums or regular annual contributions. Given the sum of money involved it should have been single premiums but it was not uncommon to see a measure of sleight of hand when these types of plan were sold thereby massively increasing the commission payable.

purch · 22 January 2007 at 9:09PM

you have an Austin Allegro of a pension!

:eek:

I had one of those back in the early 80's.........worst car I ever had !!!!

Yes it looks like it was set up as regular contributions........

Guess I was well and truely screwed back in 1990.......too late now

defender_of_the_weak · 23 January 2007 at 12:27PM

If it was set up as regular then that is possibly a mis-sale. As three singles the charges and transfer value penalty could potentially be thousands of pounds less. You may not have made a financial loss but you are stuck with Dunbar and their high charges or you are forced to bite the bullet with a transfer

FSAVC.....Transfer Value Ripoff !!!!

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