Allied Dunbar pension

shiredeon

I've just remembered the difference between regular and single contributions, when you make a contribution you purchase both capital and accumulation units for your pension, capital units are the ones to avoid as they attract the charges, when you make regular payments you aquire a much larger number of capital units than you do if you make regular single contributions.
I complained that i'd been given bad advice about the way the contributions were made and they not only changed the format in which i paid but also backdated them for three years as well.

impeystick

I just naturally assumed a stakeholder would be the only alternative to my current pension and thats what I asked him to look at. He gave me a comparison to the most competitve company on charges which was Clerical Medical. He gave me a like-for-like comparison, with the assumed rate of 5%, the total projected fund value is £299,000 at aged 63. Clerical Medical when adding both the lump sum and the regular premium together would be £261,800. (Please note that my gross premium per month is £256 including basic rate tax relief and not £200). He said the fund has provided reasonable returns (Managed AP) and I need to decide wheather the fund performance would be sufficiently high enough to acheive the projected returns of 5% or even 7%. Are these figures any good?. He also said it may be in my interest to consider alternative providers with a wider range of funds and also fund managers all in a one to one investment wrapper, thereby giving diversification of both assets and funds. I think I could do with another chat with my IFA but don't want to wind him with my poor knowledge as their seems to be a raft of pensions/investments alternatives. Maybe I should just leave everything as it is and monitor it over the next few years but checking the fund performance or will this just continually be eroded by the monthly fees that I'm inevitably paying including Waiver of contribution (£5).

dunstonh

Clerical Medical is a good pension provider but the fund recommended indicates a low experience/quality investment adviser or perhaps your request to limit it to stakeholder has resulted in that approach (probably the latter based on your later remarks). The comments made sound compliant and the warnings seem fine.

His comments on wider fund range sound more encouraging and sector allocation (diversification) is certainly considered to be the best way to invest (returns reflect that historically).

You need to decide on what you want. If you want the cheapest, then Allied Dunbar is cheaper than a stakeholder. If you want the quality funds with increased potential, then these cost more. You could consider looking at 7% on the alternative and comparing that with the 5% on the AD pension. The AD pension also has a range of funds available on it and it may be that fund switching to a more diverse range within that pension is best.

The adviser should also have done a TVAS on keeping the pension where it is but with contributions redirected. That would have given a third figure. Often that option is the better one where capital and accumulation units are involved.

impeystick

Many thanks for your comments dunstonh. Can you tell me if my projected fund value is on a par with other similar pensions (assuming it would grow by 5%). I'm just trying to get it clear in my head that i'm not losing money hand-over-fist. From re-reading all my documents and this post i don't think its a disaster.