Sun Alliance / Phoenix Life

david_Glos

I have two personal pension plans originally with Sun Alliance (now part of Phoenix) and was looking for any informed guesswork as to whether to transfer out of these badly performing with profits funds.

Both funds were started in 1992

Fund 1

Yearly Contributions of £1914
Guaranteed Basic Sum in 2021 of £86425 plus bonuses currently £12871.
Transfer Value £25403.

Fund 2
Yearly Contributions £600
Guaranteed Basic Sum in 2026 of £35091 plus bonus's currently £6790.
Transfer Value £9129

The transfer values are only slightly more than I have paid into the funds over the last 15 or so years.

dunstonh

The phoenix with profits fund is low potential for future growth. However, I have two Phoenix pensions on my desk right now and both of these have guaranteed annuity rates and are post 1988 personal pensions so there is a possiblity you could have those too. Im recommending a hold on the ones I have here even though there is likely to be little or no bonus but it only has 3 years left.

There is little need for guesswork when a TVAS is done correctly. Obviously we cannot do a TVAS on the forum but you havent provided enough information to even guess.

All we can say is that the fund is low potential for future returns. Depending on transfer charges, ongoing charges, length of time to commencement, gurantees on the plan and your attitude to risk, it may or may not be worth moving. There is also the second option of making paid up and redirecting future contributions which sometimes is the better option.

EdInvestor

You definitely need to get a full check done on the guarantee aspect of these policies.
You could be on to a winner. This is what we tend to find in these zombie type funds -the pension people will benefit at the expense of the endowment investors.

david_Glos

I can not find reference to a guaranteed annuity on the policy, just the guaranteed basic rate which I think is different. I have asked Phoenix to provide details of the paid up pension benefits as they tell me I will keep the existing bonuses if I do this. Will then look for another pension with another company through an IFA.
Thanks for your help.

EdInvestor

Note to any other Moneysavers: anyone who has an oldish pension policy particularly at a zombie fund company in a With profits fund is strongly advised to have the policy investigated by an IFA with pension qualifications so that the guarantees can be fully valued.Pay the IFA a fee.

*Do not trust what the insurance company says.*

You risk losing a lot of money if you do anything to disturb these policies before they are fully checked out.

One would assume that anyone with nearly 100k invested in a pension fund would do that anyway. DON'T make any alterations to the policy before getting expert advice.This is one area where a properly qualified advisor is invaluable.

dunstonh

Note to any other Moneysavers: anyone who has an oldish pension policy particularly at a zombie fund company in a With profits fund is strongly advised to have the policy investigated by an IFA with pension qualifications so that the guarantees can be fully valued.Pay the IFA a fee.

There is no pension qualification required for personal pension transfers. The higher qualifications for pensions are more geared towards occupational pensions, drawdown etc. Whilst I understand the sentiment, it would be like asking to see a brain surgeon because you have the flu.

*Do not trust what the insurance company says.*

Spot on. Pearl, for example, write to people transferring out telling them that they will lose valuable benefits, the new provider can be charging lots of initial charges and it is likely to cost them more by moving.

You risk losing a lot of money if you do anything to disturb these policies before they are fully checked out.

Scary here but this is the 2nd agreement from me here I would say that anyone with a pre 2001 pension should be getting them checked out.

EdInvestor

To my mind when a fairly substantial amount of money is involved as here it is sensible to have two advisors, one to assess and investigate the pension - this one you pay a fee to. Then a second advisor to make suggestions about future investment arrangements.

Doing it this way means you can hopefully remove the temptation from the first advisor to make more money out of you by "pension churning" and get a genuinely straight view on the pensions with your interests in mind, not his.

I have asked Phoenix to provide details of the paid up pension benefits as they tell me I will keep the existing bonuses if I do this.

Almost certainly however you will find the guaranteed sum at maturity is reduced if you stop paying in and bang goes the value of the policy.

On the big policy the return represents a guaranteed5.5% each and every year for 15 years regardless of how the WP fund performs.

Where can you get that on a risk investment? Nowhere.

It's almost certainly worth your while to keep up these policies