Stakeholder Pension

Wendy.Parkin

My husband has a stakeholder pension, only had it for 4 years. It is only worth roughly £13,000. Last year contributions including tax relief was £1,030.56p but it made an investment loss of £715. What do you think I should do?
I have written to Norwich Union but am awaitng their reply to find out the current update and to find out what would happen if I stopped his contributions but I would like advise on what anybody thinks I should do.
Thanks

dunstonh

What do you think I should do?

Not worry about it.

I have written to Norwich Union but am awaitng their reply to find out the current update and to find out what would happen if I stopped his contributions but I would like advise on what anybody thinks I should do.

Norwich Union will not offer any advice or opinion. It is not within their authorisation to do that.

Investments zig zag in value and that is quite normal. The volatility you get will depend on the risk you are taking with your investments. NU have quite a lot of funds for a stakeholder ranging from guaranteed options, cash, fixed interest, property and a number of equity funds. So, its easy to build a simple portfolio that can average out to meet most risk profiles.

EdInvestor

You need to realise there are two things here:

1.The tax wrapper - the stakeholder pension

2.The funds inside the wrapper that the money is invested in.

Which fund(s) have you chosen? Are you aware you can move to different funds?

Ask NU for a list of the funds available for this pension.Then go through them and choose a selection from low to high risk which fits what you want to achieve. Split your money up so you put (say) 20% in each of 5 funds which add up to what you want in terms of risk.

There is usually a cash type fund if you want to switch the money into that for a short period while markets are volatile.But it's not a good idea to leave it there for a long time as interest rates on these funds are not usually very high, so after charges the return is very poor.It's also not a good idea to switch to cash after making losses, as you will miss the opportunity of recouping the losses when the market starts to recover again.

A pension is designed to be invested in the stockmarket, not kept in cash. Over the long term, the risks of the stockmarket are reduced as high returns in good years wipe out losses in bad years.