SIPP with cash incentive promise - advice please.

gone2ground

Hi there, I have just found I have a pension with Windsor Life which I took out in the 80's and it has £23,000 odd in it which was a nice surprise. I also have one with the Prudential which was transferred from my old Balfour Beatty pension early last year as I no longer work for them and that has £7,000 odd in it. Finally, my husband has a small pension he took out years ago with the Pru with only about £3,000 in. We are considering joining them all together if that's possible and have been approached by a couple of firms offering a cash incentive to go with them. One is investing the pension in a commercial venture in Spain but I have been advised against this. The other is arable land in Australia reaping the rewards from the wheat that is farmed. The farm is being sold in 2017 and that's when the deal comes to an end. This is all we have for our retirement and know nothing about pensions - just wondered if we'd be silly to invest in these areas or whether it is a good move.
Look forward to receiving your advice.

kidmugsy

"This is all we have for our retirement". How close to retirement are you? How cheap is it for you to go and inpect the farm in Australia?

Loughton_Monkey

gone2ground wrote: »

We are considering joining them all together if that's possible.....

Yes, it's possible. By why?

Until you say why you want to do it, nobody could make any sensible comment. Are you looking to lower the charges? Or get better fund choice? Or get funds that will do better in the future? Or because you only have one filing cabinet draw free and don't want to use 3? Or are you saying it because a Financial Advisor has put it into your head? Or is one of the companies going bust?

Reading between the lines, I suspect you have fallen for the old line "Get a SIPP. It's better!"

Do not go into a SIPP unless you have a big pension fund and really know what you are doing. If you are being 'egged' into this by someone getting fees/incentives/commission then tell them to go away.

gone2ground wrote: »

....just wondered if we'd be silly to invest in these areas or whether it is a good move.....

In the extreme.

gone2ground

Wow, thank you Loughton Monkey - by your response, you obviously feel very strongly about this subject. Is this your personal opinion or is it really better to leave everything where it is? Just reading various articles says to me that there is more flexibility with a SIPP although I admit I am an absolute novice and wouldn't know where to put my funds. What is a good sum to invest in a SIPP? If someone can guarantee a percentage income over a certain period of time, is that still not a good thing? I will happily leave everything where it is but my husbands pension doesn't seem to have done anything over the 20 odd years he's had it. Does anybody out there have anything good to say about SIPPS or have any of you had any good experiences?
Cheers

gone2ground

Sorry Kidmugsy, I didn't reply to your message.
I am 43 years old so not quite there yet! We would love to go to Australia but out of the question financially. Reckon it's probably a no-go then!!
Cheers

Linton

Both schemes seem very questionable to me. It is too easy to get scammed with get rich schemes that are investing outside the normal range of investment funds. Both schemes are very much outside the norm for pensions.

How/why did these companies contact you? Can you let us know their names?

I agree with Loughton Monkey - SIPPs are not the right thing for absolute novices, they are designed for people who have the experience to chose what is right for them out of a very wide range of investment possibilities.


To answer another question - with pension investing there are no guarantees, just a range of options with a wide range of volatilities (up and down) and possible returns. As you still have perhaps 20 years to go before retirement it is worth investing in some more volatile funds that should over time provide good returns.

Final point - a total of £33k is very small at your age. You do need to be saving more if you arent going to spend what could well be the final 30 years of your life close to the breadline. It could well be worth your while talking to an IFA.

Loughton_Monkey

gone2ground wrote: »

Wow, thank you Loughton Monkey - by your response, you obviously feel very strongly about this subject. Is this your personal opinion or is it really better to leave everything where it is? Just reading various articles says to me that there is more flexibility with a SIPP although I admit I am an absolute novice and wouldn't know where to put my funds. What is a good sum to invest in a SIPP? If someone can guarantee a percentage income over a certain period of time, is that still not a good thing? I will happily leave everything where it is but my husbands pension doesn't seem to have done anything over the 20 odd years he's had it. Does anybody out there have anything good to say about SIPPS or have any of you had any good experiences?
Cheers

Yes it's truly my own opinion.

There is some tremendous 'marketing' going on. And for some reason it is always the 'novice' element that is attracted to it!

You say that a Personal Pension (like your husbands) has 'done nothing'. You should understand that no pension ever has "done" anything other than provide a tax free 'wrapper'. It's like saying my money did 'nothing' in Barclays for 20 years. That's nothing to do with Barclays. It's to do with the fact that I put the money in a 0% current account. I could have put it into a cash ISA and made much more! Barclays was just the "wrapper".

Same thing as an ISA. A cash ISA is 'good' (they say). Well yes, but it's not 'good' for those earning 0.5% because they think it's the ISA that's giving them the interest and not the underlying account.

So what would your husband's money have done in a SIPP? Exactly the same wouldn't it? But probably with extra charges.

A SIPP (Self Invested Personal Pension) has the advantage of allowing all the 'normal' investements in a PP, plus a lot more. Mainly those that might appeal to a sophisticated investor.

You say "If someone can guarantee a percentage income over a certain period of time, is that still not a good thing?" I would obviously say 'yes' if the guarantee was attractive. But to what particular guarantee are you referring? I know of no investment available under a SIPP that guarantees anything attractive. [Leave it in cash, then I suppose you are guaranteed it won't fall in value, except for any charges].

A 'Pension' is like Sainsbury's. You can go in, and buy any of a selction of items, pay a reasonable price for them, and take them home.

A 'SIPP' is like Fortnum & Masons. You can go in and buy most of the same things as in Sainsbury's. But you can also buy truffles, and exotic vegetables, and the most vintage of Balsamic Vinegar etc....

Me? I'd buy my Heinz tomato soup in Sainsbury's thankyou. By far the best things. If I want truffles, I'll go to Fortnums for them.

gone2ground

Thank you for your reply. Originally, because of a work injury which has reduced us to 1 income for the past year - I looked into trying to raise some cash from our pensions (you probably think we're stupid doing this but when you get no help from the government it's very hard). Our mortgage is suffering and we owe a fair bit and can see no way of catching up with the payments. These 'unlock your pension' companies couldn't help but referred us to these other people. There were two companies who contacted us - PFR (Planning for Retirement - Spanish Investment) and the other is a chap named Zane Hegarty running Professional Pension Services (Australian one). Have you heard of either of these?

Linton

Various items of interest which I have worded carefully. I will leave you to form your own judgement.

I cannot find any reference to either company on the net. Both companies have names that make any search very difficult as they are commonly used phrases. Why would companies choose names that couldnt be found on Google?

Neither company appears to be on the list of firms authorised by the FSA to carry out financial services in the UK. If they are not authorised by the FSA they are not covered by the FSA compensation scheme and if operating in the UK may be doing so illegally.

Zane Hegarty can be found on Google - someone of that unusual name is associated with "Alhaurin Wealth" based in Spain ( wasnt ZH your contact for the Australian scheme?). Someone of that name is also on the FSA Register but classified as "inactive".

Linton

Interesting thread on this forum last year:https://forums.moneysavingexpert.com/discussion/2625125

Just noticed - the Alhaurin website which appears to have some connection to your australian scheme just happens to be similar to that for pfrservices, PFR being the name of the Spanish scheme company. A remarkable coincidence.

gone2ground

Yes you are right about the similarity between the websites. This Zane bloke reckons he worked for PFR but didn't like the way they operated and left. Interesting.
Thanks everyone - I think you've made our minds up for us.