Prudential Private Pension Plan

Judwin

20 years ago (when I was 22), I walked into the local Pru office, and set up a Personal Pension plan. It's the "With Profits" plan. I opted out of SERPS at the same time because the government were offering bribes and inducements to do so.

I've upped and downed the amounts payed into it over the years, and made several lump sum payments into it in good years. The small company I work for doesn't have a pension scheme, so for the past couple of years I've done a salary sacrifice into it, and my employer has added the 10.8% NI contributions on top of 'my' NI and Tax etc. At the moment, the total yearly payments into it are roughly £5500. I don't earn enough to put me anywhere near the new yearly or total lifetime limits.

Last year I opted back into serps. That's not my question.

I've stuck with the Pru for 20 years, thru the mis-selling and the WithProfits scares, but I'm now wondering if it's time to try and improve future returns. I'm expecting to work till state retirement age 65/67. Last year (Feb 2006), my plan statement said I had a transfer value of approx £100K, with an additional £40K in protected rights. This years statement is due soon.

[Question 1]
I think the fees are roughly 1%pa, but where can I compare the relative performances of other pension providers versus the Pru? I'm looking for a website like the ones that graph different investment funds past performances. Google returns millions of hits if you put in "Pridential Penson Plan", but not what I want.

[Question 2]
If the Pru performance is poor compared to others, I'd consider transferring to somewhere else - either another provider or a SIPP. In theory I could move it all (excluding the protected rights) to the SIPP, and buy £666 of all the "Top 150" investment funds. Is that a good idea? The Pru seems a 'safe' bet. I don't want to have to spend hours and hours researcing and shifting funds.

[Question 3]
I'm a higher rate tax payer, and this years 'bonus' is going to leave me oweing Gordon Brown a wedge again. In previous years I've just dolloped a one off payment to the Pru plan to reduce Gordons cut. This year I'm contemplating putting it into a supermarket SIPP instead. Is that a better idea whilst I learn the in's and outs' of a DIY pension?

Opinions on the Pru With Profits scheme too please

Cheers :beer:
Judwin

ReportInvestor

Don't forget that there may be a distribution to Pru WP policyholders out of the orphan assets built up in the estate.

http://www.thisismoney.co.uk/investing/article.html?in_article_id=418462&in_page_id=166

Although there is set to be a battle royal to see whether shareholders or policyholders end up with most of the £8.7bn assets at stake.

http://business.timesonline.co.uk/tol/business/money/insurance/article1529731.ece

EdInvestor

Judwin wrote: »

[Question 1]
I think the fees are roughly 1%pa

Check to make sure: tho' there is no real way to check the fees on Wp products.

but where can I compare the relative performances of other pension providers versus the Pru?

You can't. The pension itself is only a tax wrapper: it's the fund(s) within that counts.The Pru's With profits fund is the best performer of large WP funds, but of course other types of equity funds have outperformed WP funds, especially in recent years.

In theory I could move it all (excluding the protected rights) to the SIPP, and buy £666 of all the "Top 150" investment funds. Is that a good idea?

150 funds seems to be taking the "eggs in baskets" theory a little too far. Ten funds would probably be quite enough, but you need to get your asset allocation right as well.

The Pru seems a 'safe' bet. I don't want to have to spend hours and hours researcing and shifting funds.

Stay with the Pru then.

This year I'm contemplating putting it into a supermarket SIPP instead. Is that a better idea whilst I learn the in's and outs' of a DIY pension?

Sounds sensible, especially as you seem a little lukewarm about DIY.

teddyco

ReportInvestor,

In the first link that you posted from "thisismoney" it indicates that the payout from Prudential could take months to sort out and sadly only amount to a few hundred pounds for their 4.5 million share holders.

My wife has had a with-profits pension with Prudential for the past 10 years and it has performed like a dead dog. When I compare the amount of money that we have lost by being in this policy and then compare that to a few hundred pounds promise to sit and wait longer, I would rather leave the fund now, and invest in something that promises better returns for the future.

Not being funny, but based on Prudential's performance of the with-profits funds, I wouldn't expect much of a fireworks display when or if a payout is made to shareholders.

It's always the same old story with these greedy companies. Promises, promises...............

teddyco

Judwin,

Martin Lewis has suggested going through Hargreaves Lansdown to purchase your pension and save costs on commission since Hargreaves is a discount broker and I have found this to be good information.

I have been researching the possibility of moving my wife's with-profits fund out of Prudential and into Scottish Widows through Hargreaves to save on costs, and they have been very helpful in answering all my questions and concerns.

The one thing I like about the Scottish Widows pension is the ability to invest in other funds such as the Aberdeen UK Growth fund, SW Invesco Perpetual High Income fund, SW Jupiter Income fund, and SW Artemis UK growth fund.

dunstonh

Scot Widows PPP is expected to be withdrawn soon in favour of their retirement account (a fund supermarket pension). No dates announced but we have been warned it is likely to happen some time.

Judwin

As best I can tell, the Pru WP Pension Fund is about as good as there is - for a WP fund. That was really my question.

http://www.moneyfacts.co.uk/pensions/bestbuys/pensions-wppp.aspx

seems to be saying that if you put in £1000p/a for the past 10 years, then your current Pru pension pot would be worth something like £13829. This represents approx 6% growth compounded per annum, but I don't think it includes any allowance for inflation. 6% is better than I would have got by putting the money in any building society, so I'm not overly disappointed - I certainly wouldn't call it a dead dog.

The more savvy on this board seem to be saying they aim for 10% growth per annum average, and on that basis with £1000p/a for 10 years, they'd have something like £17300 in their pension pots. Obviously a much better return.

The articles about the Pru WP Windfall seem to me to be saying I should be in for somewhere between £1000 and £1800 within the next 18-24 months, fingers crossed. I still haven't had this years statement from the Pru, but that's effectively an extra 1% bonus (for my fund) so I won't be doing anything in the short term that might disqualify me from it.

What I will be doing is opening a new SIPP (or Vantage ISA) in the new tax year, probably with HL. I'll dollop some money in, and get myself comfortable with how things work. If over a 1/3/5 year timescale I can get my SIPP/ISA to outperform the PruWP, then I'll contemplate moving from the Pru to the SIPP. I'd still have 10+ years till min retirement age (55) or 20+ years till statitory retiremnt age (67).

Cheers,
Judwin

Jay_Oh

Judwin wrote: »

In theory I could move it all (excluding the protected rights) to the SIPP,

You could move it to an insured SIPP which does include protected rights monies....

DavidLaGuardia

Jay_Oh wrote: »

You could move it to an insured SIPP which does include protected rights monies....

This is really a "Hybrid" and the Protected Rights are held searately in an approved pension and are not in the SIPP. This may or may not be advantageous to taking a SIPP of one's choice and holding the protected rights funds with a separate provider.

dunstonh

This is really a "Hybrid" and the Protected Rights are held searately in an approved pension and are not in the SIPP. This may or may not be advantageous to taking a SIPP of one's choice and holding the protected rights funds with a separate provider.

If you are investing in funds then it really makes no difference. A fund supermarket pension will only have unit trust funds available (post A day, it is estimated that is where 90% of SIPPs invest). If you want shares, then a fund supermarket will not be suitable although there are two insured schemes that come to mind that will allow shares, ITs, UTs etc. Not cheap though unless you have over £500k in which case it can be.

DavidLaGuardia

dunstonh wrote: »

If you are investing in funds then it really makes no difference. A fund supermarket pension will only have unit trust funds available (post A day, it is estimated that is where 90% of SIPPs invest). If you want shares, then a fund supermarket will not be suitable although there are two insured schemes that come to mind that will allow shares, ITs, UTs etc. Not cheap though unless you have over £500k in which case it can be.

The difference with the Hbrid schemes is that they they are less attractive in choice or cost than many SIPPs (especially online) and it may well be suitable to use these while maintinaing a separate facility for the prot rights