Halifax Pension Poor Performance

RL11

I am after some good advice as to what I should do with my Halifax pension. Please excuse my ignorance on such matters but even I can see that something is not right! My latest statement shows a fund value in June 2007 of £5,698 but in June 2008 £5,654 i.e. it has gone down by £44! During that period I contributed £611 and was charged £64. Clearly this pension is not working. Should I/Can I transfer to another pension provider? Is there someone I can complain to (other than the Halifax) to try to get back some contributions? Has anyone else experienced such appalling performance with the Halifax? Or is this typical of pension funds?

dunstonh

My latest statement shows a fund value in June 2007 of £5,698 but in June 2008 £5,654 i.e. it has gone down by £44!

Thats not bad at all really.

During that period I contributed £611 and was charged £64.

Still pretty good.

Clearly this pension is not working.

Seems ok from here.

Should I/Can I transfer to another pension provider?

Normally I would say yes but not for the reason you think. Any IFA can wipe the floor with the Halifax pension with whole of market options. However, your problem is that you dont understand investing and until you do then no pension or other type of investment is going to meet your expectations.

Is there someone I can complain to (other than the Halifax) to try to get back some contributions?

Complain about what? Halifax have no control over market conditions.

Has anyone else experienced such appalling performance with the Halifax?

Anybody invested in equities, property and to some extent fixed interest funds until recently has experienced it regardless of provider.

Or is this typical of pension funds?

No. Its typical of investments. They will go down as well as up. They zig zag. Some years you get bad years where your value goes down but the units you buy each month make up for that as when the markets go up, those cheaper units make more money.

I recommend you seek out a local IFA who can explain what investing means and how it works. They can tidy up your pension at the same time to something a bit better. However, until you understand investing you shouldnt blame Halifax.

purch

Or is this typical of pension funds?

In case you hadn't noticed the World has gone through quite a lot of Financial Turbulance over the last 12/18 months......Credit Crunch, Inflation, Oil Price rises, Food price rises, Stock Market drops etc etc etc

If your Pension Investment is in any part invested in Equity's there is a good chance it will have gone down in value.

RL11

Thanks for the fast input what you've said makes sense. However, a key point I missed out is that I have been in this Halifax Pension for 10 years and it's still worth less than what I've actually invested! I waited 10 years expecting a loyalty bonus to make a big difference but that contributed £28! I also have a Standard Life Pension (sold to me by the Halifax before they changed to just selling their own products) and this is worth twice what I've invested. My feeling is that I should have increased my contributions to that instead of starting another but I went with the Halifax advise to start another. But I don't really understand what I'm doing, so will contact an IFA.

jamesd

richlidd, the investments within the pension are the key part in deciding the performance. It appears that the ones selected in the Halifax pension did less well than the ones selected in the Standard Life pension. That could be because the choices available were worse or because no choices were made and things were left in a poorly performing default choice.

RL11

Thanks again for the input. I must admit that I'm quite surprised that no-one seems to consider the performance of the Halifax pension to be poor - it seems as though it's considered perfectly normal that my fund is worth less than I've put in! I expected to be told to send my details to a financial ombudsman or to WatchDog!!!

And the £65 fee on £611 invested is normal too? The current Halifax Stakeholder Pension shows a 1% fee after 10 years, so why am I paying over 10%?

dunstonh

Its not the pension that performs. It is where you invest. Name the fund you are in and the start date and I will give you the performance of that fund against its sector.

jamesd

richlidd, we don't yet know enough to say why it's performed as it has - if you answer dunstonh's question that will help a lot.

Paying more than 10% of the monthly payment in fees is very high but not necessarily a problem meriting a complaint to a regulator, depending on just when you started and what the fee is for. It's normal for there to be payments to a reseller of half a percent of the total fund value and 1% wouldn't be too surprising for a poor deal; those would amount to about 280 or 560 a year. Alternatively it might be a report of the total of all annual charges for the investment fund or funds used and those are usually about 1.5% of the total invested each year, 850 or so for your initial fund value. The difference might be mostly if Halifax reports these and Standard Life doesn't.

Once we have more information we'll probably end up doing more criticising.

Knowing how the money is invested in the Standard Life pension would also be helpful. It's usually possible to transfer money from one personal pension to another and it wouldn't be at all surprising if the Halifax was offering a poor product with high costs compared to Standard Life. But even for the Standard Life one you may not be getting a good deal - can't tell without knowing more about the charges for it as well.

Brum_Man

richlidd wrote: »

And the £65 fee on £611 invested is normal too? The current Halifax Stakeholder Pension shows a 1% fee after 10 years, so why am I paying over 10%?

If you read the small print I think you'll probably find the annual management charge is based on the fund value, not the contribution amount.

RL11

My Plan started in May 1995 consists of:
33% Foundation Fund: 3,400 Units (+299 since 2007)
34% Balanced Fund: 3,692 Units (+328 since 2007)
33% Opportunity Fund: 3,301 Units (+284 since 2007)
There is a death benefit of the value of the fund if that's relevant.