Taking out a new Stakeholder when I already have one

stamboy

I've done a few searches on here re multiple pensions but I couldn't see anything that specifically answers my Q.

I currently have a Stakeholder pension with Standard Life. I previously had a private pension (with Windsor Life which was 15 odd years old) and last year I transferred it into my Standard Life stakeholder.

The reason I did this was the Windsor Life plan was incurring higher charges than the stakeholder with SL. I also felt that SL were better placed to get a return on my investment in the future (again I had no evidence just a hunch).

Now I'm thinking of contributing again after 3 or 4 years of not contributing (and no company contributions). My question is do I take out a new stakeholder plan with a different portfolio? (thus negating my risk)

And if I do so will I be paying higher charges than I would do if I just contributed to my current stakeholder?

Thanks in anticipation

dunstonh

My question is do I take out a new stakeholder plan with a different portfolio? (thus negating my risk)

You dont negate any risk by having multiple providers. Your risk is in diversification of the investment funds and the investment decisions you make.

And if I do so will I be paying higher charges than I would do if I just contributed to my current stakeholder?

Depends on where you want to invest. The Std Life stakeholder isnt very good but its not bad either. It hit the average benchmark for charges and fund choice for a stakeholder. Now compare that to a pension that offers 2000 funds then its clear that std lifes 25 or so funds cannot offer anything near the options that the other can. However, you are never going to invest in 2000 funds so you have to find the balance of a provider that gives you what you want. For some people that means a stakeholder is best, for others a personal pension and for some a SIPP.

stamboy

dunstonh wrote: »

You dont negate any risk by having multiple providers. Your risk is in diversification of the investment funds and the investment decisions you make.

Sorry I meant reducing my risk not negating it.

a7man

you dont reduce any risk either, to reduce the risk you would invest in a wider choice/ different choice of funds within the current stakeholder.

stamboy

a7man wrote: »

you dont reduce any risk either, to reduce the risk you would invest in a wider choice/ different choice of funds within the current stakeholder.

I would if the portfolio I invested in was completely different!

I mean highly unlikely the one I chose would have the exact same mix surely????? What are the odds on that?

jem16

stamboy wrote: »

I would if the portfolio I invested in was completely different!

I mean highly unlikely the one I chose would have the exact same mix surely????? What are the odds on that?

You seem a little confused. The pension is just a wrapper, a container for the investments that you will put inside it. It doesn't come as a ready-made portfolio.

Normally a stakeholder pension would have around 20 funds to choose from. How may and which funds you choose would be down to you or your adviser. Each fund has a different risk ranging from low to high. The funds you choose will determine the overall risk of your pension.