NPI Pension

itsakidsworld

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Can anyone offer any advice please?

I have an NPI pension which I have had since about 1985. I only pay £20 a month/ £240 a year which I know is not alot but I have kept up the payments so as not to lose what I have invested.

However, I have once again just received my bonus statement which is 0.00%. Although the amount I pay is small, is it advisable to stop paying as at least by putting this amount in a bank would surely pay better? I am 43 years of age.

Upto date the policy says the current fund value is £12,845, the current trenasfer value is £9,634 and the current death value is £12845.

Any advice on what to do would be most welcome.

EdInvestor

This is a zombie fund.:(

Certainly I wouldn't put any more money in there, but before transferring the money somewhere else, I suggest you check if there are any guarantees attached to the policy,such as "guaranteed annuity rates". Find out how much the rate is, if so. Often these can be very valuable and if you have one it might be best to leave the money where it is.But check first.

savingforoz

I too had a pension with NPI, which was going nowhere fast on the growth front (the fund is closed for new business and is crap as a pension fund). I transferred it out, deciding that the hit I took on the transfer value would more than be made up by transferring it to a decent pension fund. It took 1 week for the value of my fund to increase enough to cover what I'd lost, and the fund is now growing for the future at a decent rate. Why not speak with an IFA, find a decent fund, transfer it out, and carry on paying into the new fund? Get out and put your money where it will grow at a decent rate over the next 20 years or so, rather than at the pathetic performance that NPI will deliver.

dunstonh

WARNING TIME.

Whilst the Pearl Group companies are generally awful. There are some funds which are absolute gems and should be kept. NPI do offer one of these within their With Profits range. If you are on one of these funds, then it can make sense to keep it. If not, it can make sense to move it.

EdInvestor

dunstonh wrote:

Whilst the Pearl Group companies are generally awful. There are some funds which are absolute gems and should be kept. NPI do offer one of these within their With Profits range.

DH

I don't suppose you'd care to tell us which fund it is, so that IKW can check he's not in it, would you?

While your own extensive expertise on the Pearl group is well known here, to be honest I doubt there are many advisors who would know anything like as much as you, and experience suggests they would be quite likely to miss this unusually good fund.

dunstonh

I'm not in my office right now so cannot be too sure from memory but it's one of the early series NPI With Profits funds. It has a guaranteed minimum 4% p.a. return. This can be desirable for those that are closer to retirement and when you take into account the surrender penalty, the critical yield required to beat the 4% guarantee could be too high to make it unsuitable to switch. NPI issue policy details sheets which do confirm if you are on the guaranteed bonus rate version. If you dont want to get an advisor to check it for you, then you could ask NPI to send you a policy details pack.

That particular NPI fund is not unsually good. Its OK for a guarantee in todays markets but its when you take the surrender penalty into account that you find it may not be worth moving it. If I was to place a bet, I would put it on you not being in that particular series fund as NPI had many versions (series as they call them) over the years. Most of the better guarantees are on the Pearl side and their pre 1988 retirement annuity contracts (but again, not all Pearl RACs had the guarantees either so no assumptions can be made there either).

itsakidsworld

Thanks for all your advice everyone. I am going to contact NPI and ask them to send me details of the policy and then maybe ask a local IFA to have a look for me.

It is a bit mind boggling trying to understand the implications you all describe so better to take it slow I think.

Thanks again and will keep you posted for more advice.

IKW

itsakidsworld

Hi everyone again,

I have just returned from a trip away and so only looked again at my policy this morning. I will contact NPI on Monday for the information pack but the "series" I have on the policy is a "series 2"? Does this mean anything to anyone?

Thanks everyone for the help

IKW

EdInvestor

If your annual bonus is zero, it seems unlikely you are in a fund with 4% guaranteed annual growth. However I would still ask if the plan has any guarantees.

If it hasn't and if retirement is some way off for you, I would consider transferring this pension money into a better one which offers likely higher performance and low charges.