Do you think I got a good maturity value?

Realistic_Midlander

This month, my Royal National Pension Fund for Nurses With Profits policy matured at £7600.

I have paid £50 per month for 10 years making £6000 paid in.

The return is disappointing but when I took out the policy in 1995, the blurb suggested perhaps £10k or £11k could be the return - although the guarantee was only a minimum of £5600.

Millions of people have of course been disappointed over the past few years, so I have to put up with a rotten return like everyone else.

Is there a way for me to compare how well or badly the RNPFN have done?

When I took out the policy, the blurb boasted that they were the best. The correspondence from them now says nothing about how well or badly they have done - indeed they have the cheek to congratulate me on the maturity of the policy.

Any thoughts please?

Also, do you believe like me that the investment companies should come clean on this sort of info when all policies mature - perhaps they could even apologise if their performance is miserable.

All the best.

dunstonh

The return is disappointing but when I took out the policy in 1995, the blurb suggested perhaps £10k or £11k could be the return - although the guarantee was only a minimum of £5600.

Millions of people have of course been disappointed over the past few years, so I have to put up with a rotten return like everyone else.

Is there a way for me to compare how well or badly the RNPFN have done?

When you invest in areas that include the stockmarket, you do have to take the pain and the gain.

In your case, you have been unfortunate to have picked the worst 10 years to save in that area. All the growth was in the early years, when you didnt have much money there and the losses in the later years when you had bought most of it when the markets were higher.

I would like to clarify something though, was this a pension or a savings plan? The way you have described it, certainly doesnt indicate pension. My guess is that it's an endowment. If so, these products are pretty much awful but were heavily sold by tied agents or more commonly brochures through the door, adverts on tv/newspapers or with some trade unions (with the trade union getting the commission). If you didnt seek advice at the time, there is little you can do about it and this is one of the risks of doing things yourself.

Given your figures, I would say that they are about low to mid table on performance.

Also, do you believe like me that the investment companies should come clean on this sort of info when all policies mature - perhaps they could even apologise if their performance is miserable.

They dont hide it. The documentation would almost certainly been sufficient to indicate this in 1995 (5 or 10 years earlier and you may have had a case). You are probably going to have to put this down to experience and understand that a mailshot isnt the best way to do savings.

Had you picked a regular savings PEP (later to become ISA) in funds appropriate to your risk level, over the same period, you would almost certainly have been paid more. An IFA would have had to have gone with PEP/ISA as best choice. A tied agent could have got away with it if they didnt have a PEP to offer. A mailshot is your choice to buy and no-one recommended it.

EdInvestor

The RNPFN is another zombie fund, a bit like Equitable Life - it had to be bailed out by Liverpool Victoria a couple of years ago. One of those demutualisations where there is no windfall.

I should count yourself lucky it wasn't a lot worse. .

cheerfulcat

You might like to have a look at this -

http://www.rnpfn.co.uk/home/pr2005-1

EdInvestor

cheerfulcat wrote:

You might like to have a look at this -

http://www.rnpfn.co.uk/home/pr2005-1

At least they're honest:

.. no additional annual bonus will be added to conventional policies, as maturity payouts are already higher than the real value of the underlying investments, due to previous levels of annual bonuses paid.

deemy2004

Realistic_Midlander wrote:

This month, my Royal National Pension Fund for Nurses With Profits policy matured at £7600.

I have paid £50 per month for 10 years making £6000 paid in.

The return is disappointing but when I took out the policy in 1995, the blurb suggested perhaps £10k or £11k could be the return - although the guarantee was only a minimum of £5600.

As its a pension fund I am assuming you got the tax top up on top of the £50 contribution.
In which case a 5% return compounded over 10 years would have yeilded £10,158 on a gross contribution of £7,692. So basically your fund has NOT grown a penny ! NOT A SINGLE PENNY ! You would have been infinetly better off putting the money in cash - isa's

IF its NOT a pension fund then £50 a month would at 5% would have yeilded £7,924. In which case its not so bad.

ffacoffipawb

Realistic_Midlander wrote:

This month, my Royal National Pension Fund for Nurses With Profits policy matured at £7600.

I have paid £50 per month for 10 years making £6000 paid in.

The return is disappointing but when I took out the policy in 1995, the blurb suggested perhaps £10k or £11k could be the return - although the guarantee was only a minimum of £5600.

Millions of people have of course been disappointed over the past few years, so I have to put up with a rotten return like everyone else.

Is there a way for me to compare how well or badly the RNPFN have done?

When I took out the policy, the blurb boasted that they were the best. The correspondence from them now says nothing about how well or badly they have done - indeed they have the cheek to congratulate me on the maturity of the policy.

Any thoughts please?

Also, do you believe like me that the investment companies should come clean on this sort of info when all policies mature - perhaps they could even apologise if their performance is miserable.

All the best.

£7,600 out for £6,000 in.

Average term of investment is 5 years and 0.5 months.

(Premium 1 has 120 months, last premium had 1 month to grow.)

That is a tax free return of 4.80%.

Equivalent to 8% for a higher rate taxpayer, 6% for a basic rate taxpayer.

Probably not too bad, the stock market has gone nowhere over the last 10 years (up and down like Good King Wenceslas' men!).

Realistic_Midlander

deemy2004 wrote:

As its a pension fund I am assuming you got the tax top up on top of the £50 contribution.
In which case a 5% return compounded over 10 years would have yeilded £10,158 on a gross contribution of £7,692. So basically your fund has NOT grown a penny ! NOT A SINGLE PENNY ! You would have been infinetly better off putting the money in cash - isa's

IF its NOT a pension fund then £50 a month would at 5% would have yeilded £7,924. In which case its not so bad.

Thanks for the comments - in fact, it was an endowment, rather than a pension.

Kind regards

dunstonh

Thanks for the comments - in fact, it was an endowment, rather than a pension.

I guessed as much. For the benefit of others, never buy a savings plan from a leaflet, advert, statement insert and dont assume to trust any union or body that is there to protect you if they happen to send it to you. They will virtually all be these poor value savings plans which were fine in the old days when you couldnt get cheap access to investments and savings rates were low. These should have been killed off long ago or at least adapted to use the same tax wrapper but on a low cost basis.

Mary_Jones_2

I have belatedly come upon the discussion about RNPFN savings plans.
In my experience of them over 20+ years they always paid well and compared favourably to other low risk investments until they sold out to Liverpool Victoria a few years ago. Since then they have stopped paying annual bonuses and little if anything in the way of terminal bonuses and justify this on the basis that the returns (allegedly) compare favourably to bank or BS savings rates. The policies were sold on the basis that they did considerably better than ordinary savings accounts.
It seems to me that the substantial RNPFN funds and members loyalty have been a cash cow for Liverpool Victoria who have no interest in maintaining the RNPFN's good record.
What would be interesting to know is whether RNPFN investors have been treated at least as well as other LV members.
Prior to the merger, RNPFN never failed to pay out annual and good terminal bonuses throughout far worse market conditions than we have experienced in recent years. They were supposed to be one of the top performers but not feature in Guardian best buys because they were not open to all.

dunstonh

It seems to me that the substantial RNPFN funds and members loyalty have been a cash cow for Liverpool Victoria who have no interest in maintaining the RNPFN's good record.

LVFS would argue that RNPFN's over generous bonuses in the past coupled with the increased solvency requirements from the FSA, the removal of the tax credit, revised accountancy standards and the stockmarket crash are why things are not as good as they used to be.

throughout far worse market conditions than we have experienced in recent years.

And what periods would they be?