Stakeholder pensions

honizz

I am 55 and have a pot of money with Abbey, it is Serps money. I have had conversations with an adviser that the Abbey plan is OK, but I could swap it for a stakeholder plan with lower charges and similar funds, overall lower risk but the past 5 year performance with the new funds has been better than my existing ones. He did explain that past performance caveat and markets go up and down story too. He talked about ratings and that the Crowns were less where I am and more where I could go, not his words but mine.
There doesn't seem to be much on here about Stakeholder pensions. The annual charge is approx 1% and that is the only charge. I can't see any reason not to do it?

dunstonh

I have had conversations with an adviser that the Abbey plan is OK

How would they know? Certainly, it will comply with HMRC rules but Abbey have been closed for business for a very long time and their products are from a different era. Its "ok" in that it does a job but is it OK compared to modern alternatives?

but I could swap it for a stakeholder plan with lower charges and similar funds, overall lower risk but the past 5 year performance with the new funds has been better than my existing ones.

What makes you think stakeholder is best. Nowadays personal pensions are for most people.

There doesn't seem to be much on here about Stakeholder pensions.

Product is coming to the end of its life. Its had its time a decade ago. Now, other options are either cheaper or better or more flexible.

CannySaver_2

Hi

Who gave you the advice?

Which Stakeholder did they recommend?

What funds did they recommend you invest in?

A Personal Pension can be cheaper than a Stakeholder, and often is. Much depends on your fund mix.

It is important that you see an IFA for advice and not a tied agent, was this the case?

The Canny Saver

honizz

I didnt add much info so here is a little more.

I did see an IFA, he is my friends Gwens IFA, She dealt with approx 18 months ago and 2 months ago had the first annual review which is what got me going again. Apparently the new plan Gwen has increased by approx 2k during its first year, whereas if it had been left where it was it would have gone down in value. Gwen works for an IFA practice and she took her paperwork in to privately show her boss and he was impressed, he said he had spent the morning battling with clients whose pensions and investments had gone down and even asked if her IFA wanted a job lol. So as far as advisers go I'm happy with him.
We talked about charges and I said out of the 2 options shown I didn't want to pay an upfront fee, the cost was the same either way so chose the commission route. From the comparisons the stakeholder route for me was slightly cheaper. I said I wanted a range of funds that looked after themselves with no need for his ongoing reviews. Abbey have an exit penalty and I have a maximum of 10 years left. The adviser said that either a personal pension or a stakeholder would be fine, He did say that if I close the plan early then the Stakeholder plan would be more cost effective as no upfront cost. He did show comparisons between the self managing type funds of personal pensions and stakeholder ones and all told the over rideing decision was cost if I closed early.
The providers were Aviva, Scottish Widows and Scottish Life, I haven't picked one yet although I know more about the first 2

honizz

Jumped in and after much deliberation took the Stakeholder with Aviva. I did this because there were no initial charges and this was important to me.

I am really excited about this now. I used to just file the paperwork and not bother about it but not anymore(maybe).

dunstonh

Jumped in and after much deliberation took the Stakeholder with Aviva. I did this because there were no initial charges and this was important to me.

Shame as that probably makes it more expensive. However, at least you are starting something now and that is better than nothing.

honizz

dunstonh wrote: »

Shame as that probably makes it more expensive. However, at least you are starting something now and that is better than nothing.

I received a table showing all options and there was £100 at the middle rate difference between all type of pensions, the cost difference was negligible for my pension.

I am looking at all the funds now and think I will do a bit of research and have a play around myself.

The fund brochure details all the funds and whenever I look them up on Google, trustnet seems to offer a lot of info. Are there any other sites with similar info?

dunstonh

I received a table showing all options and there was £100 at the middle rate difference between all type of pensions, the cost difference was negligible for my pension.

Whenever I do pension comparisons, the difference is usually in the tens of thousands of pounds. I have never seen just £100 difference. Indeed, i just completed a comparison on a pension this morning and the lowest cost at mid rate came out at £1,410,000. Stakeholder came out at £1,130,000 and most expensive came out at £1,070,000 (45 contracts quoted with another 20 odd rejected as unsuitable)

The fund brochure details all the funds and whenever I look them up on Google, trustnet seems to offer a lot of info. Are there any other sites with similar info?

Trustnet is probably your best source for free data.