Personal Pension from contracted out contributions

turbo

Hello dunston h. We have been investors in stand alone shares for more than 20 years as well as PEPS and ISAs. We have a basic good understanding of how investments work.
In our executive pension plan we put in a lump sum at the Company's year end say £15000 each as well as monthly payments. When we get our annual statement the plan has gone down by say £20000 each . Obviously I appreciate the money isn't 'lost' as such especially as more units can be bought when prices are low.

Turbo

dunstonh

We have been investors in stand alone shares for more than 20 years as well as PEPS and ISAs. We have a basic good understanding of how investments work.

So, why is it that your husband is so negative on pensions? You said its because it has lost money but as you say you are experienced investors you would know that the tax wrapper has no impact on that.

If you put the same investments you had in those PEPs/ISAs into the pension (or vice versa) the returns would have been the same. Changing from Pension to ISA or vice versa doenst alter the investment return. If you had put the same investments you used in the EPP into the ISA then the ISA would be down £20k. If you have investments that are up in value then if you had put those in the EPP at the same time then the EPP would be up in value.

turbo

Thanks dunston h for your reply.

Turbo

jamesd

turbo, it seems that switching the executive pension plan to something that allows the same investments as you use elsewhere would solve the problem. There's no need to stick to a black box pension when you can swap to one that's totally transparent with up to the minute pricing and trading if desired.

turbo

Thanks James D. How easy is it to actually do this?. The scheme was set up by our financial advisor about 18 years ago. He has since retired.


Turbo

jamesd

turbo, it's usually quite easy but I don't know whether an executive pension plan from 18 years ago might have some restrictions or benefits (like perhaps guaranteed annuity rates). dunstonh might be able to write more about that.

Have a look at sippdeal if his primary interest is share dealing. If it's funds, have a look at Hargreaves Lansdown to start and get some idea of what's available but depending on how much is going to be invested another IFA can probably undercut HL's SIPP. Worth giving either of them a call to discuss it, HL I know is very friendly and helpful even if it turns out that you don't ultimately use them.

turbo

Thank you jamesd, I have a share dealing account with HL so they ar probably the best people to talk to.

Turbo

jamesd

Yes, that seems like a good place to start.