edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
2 replies 933 views
swifty_2swifty_2 Forumite
57 Posts
My wife has been paying into a stakeholder pension with Norwich Unoin(with profits) for a considerable time. An IFA with links to her company advises a move from the stakeholder pension to a varied portfolio under the Scottish Widows banner ie. Newton Managed, Invesco Prepetual Managed, Scottish Widows Property Fund and Fidelity Special Situations. This move will also incur an considerable MVA. I do not get a warm feeling from this advice.
Can anyone please advise.
Thank you.


  • dunstonhdunstonh Forumite
    106.7K Posts
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    Depending on the timescale, attitude to risk and charges over the whole term until retirement, there can be justification for doing this.  

    The FSA issued an OP on personal pension switching last year so its certainly an area that the FSA are happy with.   Providing there is sufficient justification.   Switching for the sake of switching is not justification.

    You should be supplied with the projections on the exisiting plan and the proposed plan.  This will allow a like for like comparison.

    As for fund selection, the with profits potential is likely to be around 4-5% over the long term.   The unit linked funds potential is 5-7% over the long term (as much as my crystal ball allows me to guess ;) ).  You could compare the 5% NU projection against the 7% Scot widows to get a realistic view of the difference.  

    Because pension transfers cannot be done just for the sake of it, I assume that the IFA has found sufficient reasons for recommending the transfer.    The most common reason is charges payable over the term are better with the new provider.  The fund selection spread isnt bad.  I have used all the funds in question although i tend to recommend a wider spread than that.    Although that may depend on the fund value of the transfer.  That may also be influencing the choice of provider as SW are ok with small fund values but not with higher fund values.

    You say your wife has been paying into a stakeholder for a considerable time.  However, they were only launched in 1999 so are you sure it is a stakeholder?  

    I have recently ceased using Norwich Union for new pension business.   I made a servicing enquiry to them recently got sent onto an Indian call centre and mucked around until I ended up back in Norwich.  30 minutes later I got a verbal response that i wanted.   Their very poor servicing standards and lack on offline servicing mean its no longer economical for me to use them.  I would think the same applies to many other IFAs as well.

    Scottish Widows servicing levels are much better. Although i must admit to only using them with smaller fund values.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Thank you DD for your most comprehensive reply. My wife moved to a stakeholder pension in 1999, but previous to that was still with NU and has a considerable amount in a paid up account.
    Thank you.
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