prudential pension question..

Jon_S_4

Ive had a prudential pension for about 15 or so years, and at the moment i am looking at my finances and checking i am getting the best deals..

I remember reading somewhere (maybe here) about the pention salesman or woman who signs you up gets a monthly cut of your payment, is this true or did i imagine it ?

If so, how can i stop this and get all monies paid into my pension fund ?

I think i took out life assurance with the pension as well, is it better to do the two seperatly ?

I will speak to the prudential and find out all the details of what i signed up for 15yrs ago...

any advice on what to look for when reviewing my pension is apreciated

thanks

dunstonh

I remember reading somewhere (maybe here) about the pention salesman or woman who signs you up gets a monthly cut of your payment, is this true or did i imagine it ?

If so, how can i stop this and get all monies paid into my pension fund ?

If it was sold by a Pru advisor, then at the moment, Pru are pocketing the renewal commissions, if any due. If it was sold by an IFA, then the IFA is getting it, if any due. Unless that IFA is no longer trading, in which case Pru are keeping it.

You cannot have this money paid to yourself as you require an insurance agency with the provider and you have to be authorised by the FSA to get one of these.

Chances are, if there is any, then it will be less than a pound or two.

I think i took out life assurance with the pension as well, is it better to do the two seperatly ?

They are seperate. They may have been packaged as a sale but you should find that each has a different policy number. It may only be a small difference but it should be different.

If the life cover is pension term assurance, then its best to keep it at the moment as you cannot currently get as favourable terms on pension term assurance for new business. Anyone with an existing policy, can keep it under the old terms. The rules on this are being updated in April 2006.

I will speak to the prudential and find out all the details of what i signed up for 15yrs ago...

They will provide factual information but they are not allowed to provide any advice or suggestions. You will find any question you ask which is not factual will be responded with them saying you need to see an IFA. This isnt them being difficult. It is an FSA requirement based on their current status.

any advice on what to look for when reviewing my pension is apreciated

Yes, quite a lot with Pru pensions. They are not all the same. Some have guarantees built in to them, some have fairly decent charges. There is no blanket response to suit all Pru plans though because of the differences. Each one would need to be reviewed on its own merits.

Jon_S_4

Thanks for the comprehensive reply dunstonh, ive just dug out my old paperwork and it says i have a 'with profits cash accumulation fund'.
The life cover is ' life cover deriving from members premiums' and the benefit is '£10,000 payable on the death of the member before the termination date. This benefit is without bonus participation.'

Any thoughts on the above ?, im 37yrs old, single with no dependants....

thanks

dunstonh

If you dont need life cover, then dont pay it. Its a waste of money. Especially as the pension fund is paid out in full on your death (before retirement) anyway. £10,000 isnt going to do much and hopefully, at age 37, you have a bit more than 10k in the pension.

The WP cash accumulation fund may not be that desirable (i have to be careful in wording it so saying I wouldnt want my money there doesnt side like advice ). With some of the Pru pensions, they do offer alternative funds, which may be the best option. Otherwise, switching it to an alternative provider is another option. However, you would need to compare charges on that first. It may or may not be worthwhile. My experience is that 3 out 5 Pru pensions can be switched and either save money or at least be the same. Pru rarely charge a penalty to move and most Pru pensions have no MVR at this time(reduction penalty).

If you feel confident doing it yourself, you should look into it. If not, you could ask an IFA (ideally a pensions specialist) to do a transfer analysis and report on the pension.

EdInvestor

Hi Jon

Interested to know a bit more out how your pension has performed over 15 years.Has it been invested in cash?

dunstonh

Its not cash in the way you are thinking ed. Its a lower risk with profits fund. (with lower potential both ways)

Jon_S_4

Thanks for the advice, will ask the prudential for other pension schemes and get further advice

EdInvestor

dunstonh wrote:

Its not cash in the way you are thinking ed. Its a lower risk with profits fund. (with lower potential both ways)

I thought it probably wouldn't be, with a name like that.

If it's a lower risk WP fund it might well have done better over the last 5 years than an ordinary WP policy, because it would have more money invested in bonds and property and less in the stockmarket.

At least that would be the case elsewhere, the Pru may be an exception.

IMHO most people when investing in WP thought they were choosing a "cautious" strategy: but instead they got a "balanced" one.

Jon_S_4

Ive just had a reply from the prudential and the following funds are available for me to switch to:
With Profits (Cash Accumulation)
Deposit Fund
Newton Higher Income
Newton Managed
Invesco Perpetual Income
Invesco Perpetual Managed
Prudential Exempt Managed Tracker Fund
Prudential International Pension Fund
Prudential Managed Pension Fund
Prudential Equity Pension Fund
Prudential North American Pension Fund
Prudential European Pension Fund
Prudential Pacific Markets Pension Fund
Prudential Japanese Pension Fund
Prudential Small Companies Pension Fund
Prudential Ethical Pension Fund
Prudential Fixed Interest Pension Fund
Prudential Corporate Bond Pension Fund
Prudential Cash Pension Fund
Prudential Property Pension Fund

They add 'You can invest in a maximum of 20 funds. There is no switching charge however a Market Value Reduction could apply. We cannot predict what MVR will be and it can change on a daily basis.
Fund details can be located on our web site, https://www.pru.co.uk . On the menu on the left-hand side of the screen you will see fund prices and fact sheets, click on this. You will then go to another page, which shows different funds, click on 'pension funds', then click on 'Prudentail Ex Direct Sales Force Pension' funds. This will take you to the correct area.
You may wish to discuss your options with your financial adviser. We are not authorised to give advice.
I hope this is helpful.
Please contact us again if you need any further help or information.'

Any advice would be most apreciated as to which fund(s) i should move my pension too.

thanks

dunstonh

I know what funds out of those I would pick. However, I would be more inclined to move it lock, stock and barrel into a more appropriate and modern contract with an even greater range.

We cant give you fund recommendations here though.

Jon_S_4

Thanks for the advice dunstonh, i think moving it all would be the best option too.

Can you not give me your recommendation because of board rules or because your an IFA ?