Personal Pension Term Assurance? What is it?

mrsbez_2

Help required!

My OH pays £20 to consolidated financial services ltd and he cannot remember what it is. Think he was sold it when he opened a personal pension in 1993 though Lloyds.

He has some paperwork from Lloyds stating it is a pension term assurance.

I've not heard of this, we have term assurance to cover our mortgage but do we really need it to cover pension contributions? Is it worth keeping.

My OH is self employed.

Can anyone tell me more about this assurance and whether it has any advantages, tax etc.?????

Thanks.

We are trying to budget and need to know whether we need to keep paying out for this.

dunstonh

It is highly unlikely to be pension term insurance. Indeed I can say that it certainly isnt. Lloyds was tied to Black Horse Life for life and pensions business in 1993 and they did offer a pension term assurance then but it was only with BHL.

Consolidated financial services is the direct debit name for a rather useless product they sold called accident insurance. It is underwritten by consolidated marine and general.

For reference Pension Term Assurance is pure life cover but with tax relief on the premiums. Usually the premium will be lower than a level term assurance because of that tax relief. However, that doesnt really matter in your case as it isnt what you have.

Lloyds staff were heavily targetted to sell this "PAP" as it was known. It was sold with nearly everything they did. It covers loss of use of fingers, toes, arms, eyesight etc. It pays a small amount as a lump sum if one of these unlikely events occur.

Whilst you are reviewing your financial services products, I strongly recommend that the pension is reviewed. It may have the scottish widows badge on the paperwork now but it is not the scottish widows product (which is vastly superior). Alternatives exist that are cheaper and have a better fund range so i strongly recommend you get independent financial advice.

mrsbez_2

Thank you very much!

Yes i think it is the accident insurance, have just found some more paperwork.

He has been paying it for years and i don't think it is relevant.

I am grateful for you advice regarding the pension. In fact he has two pensions with lloyds/scottish widows, one a personal pension he took out in 1993 which is not performing well ( i presume it has higher charges) and he was then advised to take out a stakeholder pension in 2002 on top of his original pension.

We will seek advice, i would of thought he would be better making all his contributions to the stakeholder.

Thanks again!

dunstonh

We will seek advice, i would of thought he would be better making all his contributions to the stakeholder.

Not necessarily. An increasing number of personal pensions are offering lower charges, for longer term contracts or for higher value funds.

With FSA rule RU64 likely to be removed this year, you may even see stakeholder pensions beginning to be removed from product provider line ups. Stakeholder served its purpose in bringing charges down but its becoming increasing less relevant.