Repensioning from with profits funds

jenney

I seem to have omitted the NU WP Guaranteed fund value which is £26,027.

dunstonh

I hope this information is useful. I am happy to carry on scrounging for advice

Nothing here is advice. Regardless of whom its from.

However I do find it very difficult to find a IFA who is able to advise sensibly on the merits of respective funds and compare charges.

But seeking advice from a website made up of unknowns is better?. Some of whom have a history of misinformation or being heavily opinionated against pensions, even when pension is the best option.

Any IFA can compare charges. With pension transfers, some will be more competent than others depending on whether it is their core business or not. You wouldnt want a GP performing heart sugery would you. However, it's one of most simple things out there. Sure, some providers can make it difficult to give total explicit and total implicit charges but projections using like to like figures always give an indication of what is best.

Some With Profit funds to contain a guaranteed minimum bonus rate. NU do offer these with some of their legacy pension business and it can be quite desirable to keep. Especially if the charges are lower as well.

The key seems to be whether any future cost savings and possible better performance will outweigh the transfer "penalties".

That's one of the easiest bits to compare. Especially using TVAS software.

The SE frozen WP fund looks a dog.

The fund might but there may be other funds available within the pension (and this goes for NU too), which you could switch to rather than transfer. Of course, that would be only if the charges are lower on the existing plans.

EdInvestor

Hi jenney

Just to clarify a few things:

jenney wrote:

Scot Equit WP Endowment £23,076 (closed to further contributions)Scot Equit High Equity WP Fund £23,136
But transfer value £42,212.

This the transfer value for the two pensions together, right?
So there is an exit penalty/MVA of 10%, not too bad. .

Two things to check here:

1) any GAR ( guaranteed annuity rate) on either of them, especially the first one and any Guaranteed Investment Return (GIR).

2) Find how much of these two WP funds is invested in equities and property (the percentage).

It will probably be best to move these two out.The bonuses are very low.But need the above info first.

The Norwich Union Fund values are:

WP £17,604 (final bonus £288, market value reduction £482) Bonus rate was 4%
WP Guaranteed 26,027 (final bonus £2491, market value reduction £89) Bonus rate was 4% and is guaranteed at that level.

There are two separate WP investments here,right? Any transfer value?Exit penalties appear low Is the bonus rate on the first one guaranteed at 4% like the second one? Are there any guaranteed annuity rates on either of them? Again, how much of these two WP funds is invested in equities and property?

3% compound growth seems to be guaranteed in the SE WP funds. The NU WP Guaranteed fund seems to guarantee the 4% annual bonus.

I think you will have to write and ask them about these guarantees if you don't want to consult an IFA.

Since you have quite a long way to retirement, I would be inclined to think you should move this money out to a low cost online SIPP or low charge stakeholder pension (possibly with the existing providers) where you should be able to invest it at a great deal better than 3 or 4%. But if you're very risk averse or know nothing about investing and aren't interested in learning or have other pension assets, you may prefer to play it safe and stick with the guarantees, especially if there are any GARs.

Clarification is needed on them and the investment status of the various WP funds IMHO before any suggestions can be made.

EdInvestor

dunstonh wrote:

But seeking advice from a website made up of unknowns is better?. Some of whom have a history of misinformation or being heavily opinionated against pensions, even when pension is the best option.

This is a rather silly remark since the money we are discussing is already in the pensions and can't be removed. :rolleyes:

IMHO it is very wise, particularly when quite large sums of money are at stake, for investors to seek help to understand the issues that will affect it. Far too many people are totally uninformed about even the most basic financial facts and are thus easy prey for the less scrupulous cowboys in the financial services industry.

When the industry can guarantee its professional ethics so as to prevent people from falling into the clutches of said cowboys, self help may not be necessary.But not before.

whiteflag_3

"low cost online SIPP or low charge stakeholder pension "

Ed question - Why recommend a stakeholder when there are personal pensions available with lower charges, large fund discounts and much wider fund choices?

dunstonh

IMHO it is very wise, particularly when quite large sums of money are at stake, for investors to seek help to understand the issues that will affect it. Far too many people are totally uninformed about even the most basic financial facts and are thus easy prey for the less scrupulous cowboys in the financial services industry.

I agree that discussion is fine and desirable but if I had a fault with my car, I would like to identify the likely problem but I wouldnt fix it myself based on what has been told to me but some unknown on a website.

I also dont have the view that the majority of advisors are corrupt. A view that too often gets expressed on these forums. As has been said many a time, stick to independents, rather than tied or multi-tied, stick to local firms rather than national/regional salesforces and you limit your chances of getting poor service/advice.

A pension transfer is not the simplest of transactions. I know IFAs that will not do pension transfers because it scares them that there is too much to know and the potential for getting it wrong is so great. So many legacy schemes with varients and options with providers using different projection rates and styles can give a misleading impression to those who dont know what to look out for.