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  • FIRST POST
    • UncleZen
    • By UncleZen 13th Jun 17, 4:30 PM
    • 539Posts
    • 196Thanks
    UncleZen
    Should I continue Contributing
    • #1
    • 13th Jun 17, 4:30 PM
    Should I continue Contributing 13th Jun 17 at 4:30 PM
    The pension is with Phoenix Life, it was orginally a RSA plan, value £19k, so not large, in a "with profits" fund, the plan holder is 60, is essentially retired, but doesnt need the income that this may generate.
    It has £32/m contributions, or £40 inc tax relief.
    The plan went up in value by less than £200 over the last year. After putting in £480. To me that's wasted money. Poor performance etc.
    I have told them to stop taking contributions.
    I then got to thinking what to do with the funds, the options; Lump sum & encashment (with tax etc), annuity, transfer. Drawdown is not an option.
    AIUI annuities these days are poor value.
    My instinct says draw down, which I see as basically drawing money in an adhoc way from what is a savings pot (taxable)
    I do have another plan to transfer to, but I need to review that and see if its performing, also there's all the eggs in one basket risk.

    Sorry, its a bit of a ramble.
Page 1
    • atush
    • By atush 14th Jun 17, 10:35 AM
    • 16,246 Posts
    • 9,917 Thanks
    atush
    • #2
    • 14th Jun 17, 10:35 AM
    • #2
    • 14th Jun 17, 10:35 AM
    In general, WP pensions dont go down.

    Check your figures
    • dunstonh
    • By dunstonh 14th Jun 17, 11:16 AM
    • 89,534 Posts
    • 54,984 Thanks
    dunstonh
    • #3
    • 14th Jun 17, 11:16 AM
    • #3
    • 14th Jun 17, 11:16 AM
    The plan went up in value by less than £200 over the last year. After putting in £480. To me that's wasted money. Poor performance etc.
    The old WP plans with guarantees built into them tend to have lower rates of return as they benfit is in the guarantee.

    Or it could be that the current value only went up by less than the transfer value as the bulk of the return on these plans is in the final bonus and not the annual bonus.

    I then got to thinking what to do with the funds, the options; Lump sum & encashment (with tax etc), annuity, transfer. Drawdown is not an option.
    Why is drawdown not an option? Just because a legacy plan does not offer it, does not mean it is not available to you. You just transfer it to one that can.

    also there's all the eggs in one basket risk.
    Why is that a risk?
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • UncleZen
    • By UncleZen 15th Jun 17, 9:06 AM
    • 539 Posts
    • 196 Thanks
    UncleZen
    • #4
    • 15th Jun 17, 9:06 AM
    • #4
    • 15th Jun 17, 9:06 AM
    @dunstonh
    Drawdown is not an option with that provider on that plan, I realise it could be transferred elsewhere to take advantage of that.

    The risk is that the plan is badly invested and the value falls when other rise owing to changes in the markets, or the management of the plan.

    It's difficult to get a handle on any final bonus, there was a leaflet on this subject with the statement, but none of their operators had seen it.

    @atush
    In general, yes, but this one has over the last 2 years.
    • dunstonh
    • By dunstonh 15th Jun 17, 10:38 AM
    • 89,534 Posts
    • 54,984 Thanks
    dunstonh
    • #5
    • 15th Jun 17, 10:38 AM
    • #5
    • 15th Jun 17, 10:38 AM
    It's difficult to get a handle on any final bonus, there was a leaflet on this subject with the statement, but none of their operators had seen it.
    Its actually quite easy. Ask them for the current value (which will be without final bonus) and ask them for the transfer value (which will include final bonus).

    The risk is that the plan is badly invested and the value falls when other rise owing to changes in the markets, or the management of the plan.
    There is also the risk of making a bad decision on wrong information.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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