Norwich Union Pension - Fund Selection

Peartree

I posted a question re my Norwich Union (Provident Mutual) pension fund a little while ago and, with your good advice, wrote to NU and got further information on the fund. Now I need some thoughts on what to do next.

Current fund value is £26,679.96 with all 1884.311 units invested in the Managed Fund which is medium risk/return. I cannot make any further individual contributions and the last ‘SERPS’ contribution was made in 1998. There is no terminal bonus or guaranteed annuity rate.

I can make one free switch of funds per year and all further switches are charged at 0.5% of the amount switched to a maximum of £25. The funds available to me with NU are:

Deposit Fund (low risk/return)
Fixed Interest Fund (low to medium risk/return)
Index Linked Gilt Fund (medium risk/return)
Managed Fund (medium risk/return)
Property Fund (medium risk/return)
Overseas Equity Fund (medium to high risk/return)
Equity Fund (high risk/return)

I’m now 44 and in a good LGPS pension, have a lot of equity in my property and other investments. At this time I’m prepared to go medium/high risk on this investment at least for the next few years. I’m only one step up from a complete novice on investment but am working hard on learning more so I can more actively manage what I’ve got for the best return in years to come.

To (finally) get to my question. Any opinions (not advice I know!) on what I should do with this pot at this time?

- Are the funds NU are offering reasonable performers against the rest of the market or would I be better transferring to another company?
- Would I be better moving to a combination of the funds offered rather than staying with the managed?
- If so, what sort of mix?
- How often should I review the allocation?

Any opinions very welcome.


Peartree

peterg1965

Just to say that you will get, as you know, some very erudite comments reference your pension fund dilemma. I was in a similar situation with my Serps contributed pension fund but i seemed to have a few more options with my Scottish Equitable fund, with a lot more access to external funds. Transfering to them to invest my, relatively modest £16K funds, in a more risky profile (within 6/7 different investment funds) has had an immediate impact on its value. Are you sure that you are limited to those NU internal funds and there is nothing external? I think your funds will also be 'Protected Rights' which limits your options with regards to transferring to a SIPP, although the law may change on that score in the future.

I am also in a great final salary scheme, and a similar age to yourself, so can afford to become an amateur investor with the Serps fund. Good luck.

dunstonh

Being an old provident mutual policy, that would be the only fund choice.

It isnt ideal but it's a 1% contract so its on par with most stakeholder pensions.

A bit of property, overseas and equity along with a bit of fixed interest and do a once a year rebalance and you should be fine. It isnt as good as modern options and most Prov Mutual plans have no transfer penalties. So, moving to a modern equivalent could be a better option. You certainly have time.

You dont need to jump into a full SIPP to get a better range. There are some very good personal pensions out there with good fund ranges and cheaper than SIPPs.

EdInvestor

NU has a personal pension contract with a range of good external funds. Why don't you ask them if they would move you over at the same charge?

Peartree

I will ask NU about personal pension contract. Where would I look re other personal pension options?

Peartree

EdInvestor

Standard Life and Scottish Widows both have a good selection of external funds (and the former's own funds are also good performers) plus reasonable charges.