Equitable Life PPP - Stay or go?

axial_2

I'm in my late thirties, and started my EL pension 10 years ago. I have not made contributions since the whole EL mess started; preferring instead to pay off my mortgage. My PPP is split 60/40 equities/with profits and is currently worth £22k.

I have been following the 'contract in/contract out' threads with great interest as EL are advising me to contract back in - thanks for some good advice.
I've decided to stay contracted out.

My dilemma is whether I...
1. stay with EL (and start making contributions again)
2. move to my company's stakeholder
3. move to a SIPP.

If I move from EL I'll be penalised 9%, plus protected rights make up 40% of the pension. Will I be able to move the PRs to a stakeholder or SIPP?
I am medium risk taker.

Stompa

If I move from EL I'll be penalised 9%

Isn't it currently 8%?, and presumably that would only apply to the with-profits component?

Stompa

EdInvestor

An MVA of 8% is quite low by Equitable's standards.I should get out .You can't put PR money into a SIPP yet, though maybe next year it will be allowed.

Will your company pay a contribution into its stakeholder for you if you contribute? If so it's a no brainer to move the pension there and start paying in. Even if it doesn't contribute, it may have negotiated low charges so this could be a good move anyway.

dunstonh

Possibly not a big as hit as normal as it appears its a mixed unit linked and with profits spread (judging by axial's post). However, one thing to verify first is if the 8% is just the transfer penalty? The MVR could be on top of that.

axial_2

I'll check with EL whether its just 8% following Dunstonh's comments (thanks).
So can I transfer PR money into a stakeholder, or will that money be stuck with EL forevermore?

My company does not contribute unfortunately. My company's SHP is with Legal & General. I believe the charges start at 1% falling to 0.8% once the fund is over £25k.

So judging by your comments would you say EL is still a lame duck as far as pensions is concerned?

EdInvestor

The 8% is the MVA and will only apply to the WP bit of the pension. Equitable is most definitely a lame duck and people should take the opportunity of the lowish MVA to go IMHO.Why take the risk of getting trapped there if it goes into administration or gets broken up and sold to a zombie fund?

If it were me I would move the PR money to the company stakeholder and put the rest in one of the low cost online SIPPs chosen to suit my planned investments.

axial_2

[If it were me I would move the PR money to the company stakeholder and put the rest in one of the low cost online SIPPs chosen to suit my planned investments.[/QUOTE]

Hmmm, wise words, thank you.

So, what you're saying is that the PR money sits safely in the company stakeholder, out of harms way and maturing quietly.

Presumably all future NICO contributions can only be paid into the SIPP if that's what I decide to do?