scottish widows

farenuf

does anyone know what the scottish widows payed out recently for their mystical "FINAL BONUS" to personal pension clients <with profits ha ha type pensions> I mean in percentage terms.

dunstonh

Depends on which version of the with profits fund you have and what the contract terms are. Those plans with guarantees, for example, tend to get less than those without.

It also depends on timescale held and amounts paid and when.

farenuf

its a GAR P/P with profits not a large amount, approx 24k is the gauranteed amount,but over the last few years nothing at all has been added to the pot and no bonuses have been added despite my paying in £700 PA,thinking of ditching it and taking any penalty on the chin as I dont want to keep paying into something that "may" pay a bonus.Its got another 7yrs to run until official retirement date.

dunstonh

over the last few years nothing at all has been added to the pot and no bonuses have been added despite my paying in £700 PA

That makes it sound like it may have a guaranteed cash sum assured and guaranteed annuity rates.

thinking of ditching it and taking any penalty on the chin as I dont want to keep paying into something that "may" pay a bonus

That may be the right option but its very possibly the wrong option. If it does have a cash sum assured and guaranteed annuity rates (SW WP plans taken out before 1995 usually did) then the value is in the guarantees not any possible bonus. In these cases, SW would love you to transfer the money out as it would save them a fortune.

farenuf

official title is p/p plus guaranteed annuity rate of 98.04,started1985 and also carries a death benefit without profits.With profits cash benefit,unit linked.waiver of premium.It really doesnt make sense to me continuing to make contributions with no visable increase to the pot.

dunstonh

It really doesnt make sense to me continuing to make contributions with no visable increase to the pot.

You are not looking at the package though. Stop looking at the bonus and look at that guarnateed annuity rate. 9.804% (or £98.04 per thousand). That is 50% higher than the open market rate.

So, any alternative you did would have to grow by 50% just to match the pension income on the SW plan.

Plus, it looks like there is a cash sum assured as well which will effectively be a guaranteed minimum maturity value. So, even if the bonuses were paid, they are almost certainly lower than the guaranteed cash sum assured. So, no point adding bonuses.

The cynical would say that SW are not adding bonuses as they hope you do transfer without realising you are giving up a good pension. There may be an element of truth in that but they are not paying bonuses as the guarnatees are where the value is. Not the bonus rate.

How old are you?

farenuf

I am 53 and I am thinking of other investments that I could make with the £700 per year for the next 7 years, your almost certainly correct that SW are hoping that people will naturally be unhappy with the way this policy is now in limbo and policy holders would certainly be better served with more info provided.

dunstonh

At 53, its a no brainer to stay with SW. You are effectively guaranteeing a 50% return over any alternative based on the GAR alone. If there is a guaranteed minimum fund value then that figure would be even higher.

farenuf

many thanks for your replies,much appreciated rgds