prudential pension question..

dunstonh

teddyco wrote:

I was speaking to Prudential about my wife's Pension Policy and they have indicated that this particular pension contains 100 percent protected rights and cannot be transferred to a Hargreaves Lansdown Vantage Sipp.

Do you have any suggestions what I should do? If I wait until after A-Day do you think the laws will allow this fund to be moved?

Thanks!

Hybrid SIPPs will be able to take it after A day. Hybrid SIPPs will only allow unit trust/oeic funds but that is where most end up anyway.

KMK

Will Prudential's hike in profits (20%) affect my AVC's which I am about to draw on after A day? I believe I can take 25% as cash. The whole thing is only worth about £40 000 so I am hoping that the profits will have boosted the fund after many barren years. Am I right or deluded?

ReportInvestor

Hi KMK,

The 20% I think refers to the gains on the WP fund, not to Prudential's own company profits. My answer below assumes you are invested in a Prudential with profits policy.

This performance is very good news for Prudential AVCs (are you a teacher? - if so your union chose the right company to go for in a with profits fund).

You won't get the full 20% as some will be held back for smoothing, but you should get a decent return.

I would anticipate that you would also benefit from a higher terminal bonus on maturity (assuming no market crash in the near future), in addition to the increase in your basic policy values

I would describe Prudential's 45% gain over the last 6 years (compared to other funds' 20%) as good in the cirumstances, rather than "barren".

But you're not deluded and can look forward to a pleasant annual statement in ?March .

dunstonh

AVCs have to be taken at the same time as the occupational scheme at this moment in time. There is nothing written yet to suggest that is changing although nothing to say it isnt. However, a number of the rule changes which can apply to AVCs will only take place if the trustees amend the scheme rules.

FSAVCs have no such restrictions.

KMK

Thank you both for such reassuring news! Yes, I was a teacher and believe it or not when I was first considering an AVC many years ago, I almost chose Equitable Life as an FSAVC provider because it seemed so safe! Thank goodness I didn't! The fact that the Pru was all the unions' choice swayed me and it was done via the pay roll.

My next decision is what kind of draw down to choose from April, if all goes to plan on A day. I have a reasonable pension of £22,000 and my husband, who is still working, will get about £15,000 when he retires in 2 years' time. I intend taking the 25% cash but am still unsure about the annuity. A thorny problem, I fear. any ideas?

EdInvestor

KMK wrote:

My next decision is what kind of draw down to choose from April, if all goes to plan on A day.

Some discussion here