Should I do something about Equitable?

Freecall

I still have a pension fund with Equitable Life to which I contributed in the mid 1990’s through my then employer.

This amounts to about £36k (split £25k unit linked / £11k with-profits) and I have just received my compensation - £750.

I have a Scottish Widows stakeholder pension fund to which I have been contributing for several years and to which I continue to add. I also have a small final salary entitlement which is frozen from several years ago.

My question is, what do I do with my Equitable fund?

The options seem to be :

1. Do nothing.

2. Transfer the with-profits to the unit linked and leave with Equitable.

3. Move either the whole lot or just the with-profits sum to my Scottish Widows scheme.

Other background stuff :

Age 55 (basic rate taxpayer)

Anticipated retirement 60 (although may not have to draw pension for a few years after that).

I would appreciate any thoughts plus any comments as to whether it would be practical to sort what I would have thought was a relatively simple matter myself.

Thanks in advance.

atush

How has the equitable pension performed in the last 10 years? They iniitally had to move from equities in order to preserve capital but this may have meant good performance during the economic crisis- i don't know.

What funds are availalbe int he unit linked now? What are the charges? If charges are high, and performance and fund choice poor I would move the money. But the WP part may have an MVA so check the details. Also, were you one of the people who's pensions had a valuable GAR?

Freecall

atush wrote: »

were you one of the people who's pensions had a valuable GAR?

I wish!



The unit linked bit has not done too badly but the with-profits bit has remained much the same value. The current valuation (split £25k unit linked / £11k with-profits) is the result of a 50/50 split when invested – there’s a graphic example of investment decisions over the long term – but let us not dwell on the past.

I don’t know what the charges are but as far as I am aware I don’t have any say over the with-profits investment and therefore no decisions to make apart from whether or not to move the money.

atush

What is the MVA if you move the WP bit to the Unit linked bit?

Freecall

Well the truth is I don't really know.

The figure that was given to me when I last enquired was 5% but I have also been sent a document which says that I will get a 12.5% 'enhancement' if I transfer out of with-profits benefits.

On that basis moving would seem to make sense but somehow I lack confidence in what I have been told as in multiple places in the documentation it warns of reductions for leaving before age 60.