Stakeholder to private pension transfer

missrlr

:j

I have a stakeholder which I started shortly after graduation - contributions have varied over the years but I have managed to put an average of 6% my salary since the time it was set up into this.
I also have a stakeholder previous company pension that I changed to a personal one and continued contributing to after I left the company. I have managed an average of 6% salary into this one.

These have been reviewed over the past 3 years by 3 different IFA's and the consensus was "they are doing OK - nothing better out there". I kept the 2 as a risk strategy and as combining them apparently was not going to achieve a lot.

IFA has moved firms and reviewed my pensions again as fund choices are different. She is recommending to transfer the stakeholders to a private pension product with this new company with investment in different funds, which the evidence of fund growth net of fees seems to be 17% and 19% for the stakeholders versus 54% in this fund over the past 5 years.

As I am clearly not a pensions expert I wondered what pitfalls there may be in changing from a stakeholder to a private pension. I realise the charges on the private pension product will be higher than the stakeholder products, but if the growth is significantly better (yes I know it can go up and down the graph shows this too) then I cannot see a reason for the place my money is invested in not to change if the prospective benefits are greater.

I also think I am missing the point here - that there is some huge chasm I am not seeing and that the products I have may have benefits the current one does not.

Any thoughts greatly appreciated.

dunstonh

As I am clearly not a pensions expert I wondered what pitfalls there may be in changing from a stakeholder to a private pension.

There is no such thing as a private pension. Private pension is often used to cover all types of pensions that are not offered by employers. Do you mean personal pension by any chance?

I realise the charges on the private pension product will be higher than the stakeholder products

Not necessarily. Personal pensions on a like for like basis are often cheaper than stakeholder pensions. Especially on long term cases.

Stakeholders tend to be a basic product with basic investment funds. You would never expect the stakeholder to be best. Its more about keeping it simple. That doesnt mean alternatives will be better. It just means investment options on the alternatives may be better. Only time will tell.