pension or premium bonds

mikeyranson

I have no trust, faith or likeness for banks after recent events. I dont trust the markets and i dont trust my financial advisor anymore as i think he is chasing his bonus points or commission rather than giving a stuff about me.
I have £35,000 in my pension with norwich union. as my trust and faith is a zero now, i was wondering about whether i could transfer that money and put it into premium bonds instead. Hopefully this would give me some winnings over time and a better chance of the big winnings. I feel that it is safer there than the banks and stock & shares. If the banking system goes tits up again, then i have been told that i would never loose my premium bonds as you would money in the banks./ I lost nearly £10,000 of my halifax shares when Lloyds screwed that up for me. Add my divorce to that equatiuon, you can see i have had it pretty rough and understand my need to protect what i have left.
Any advice is much appreciated.

noh

Halifax screwed themselves. Lloyds being persuaded into taking them over at least saved you something.

I don't know of any pension providor that allows Premium Bonds to be held.

BobQ

mikeyranson wrote: »

I have no trust, faith or likeness for banks after recent events. I dont trust the markets and i dont trust my financial advisor anymore as i think he is chasing his bonus points or commission rather than giving a stuff about me.
I have £35,000 in my pension with norwich union. as my trust and faith is a zero now, i was wondering about whether i could transfer that money and put it into premium bonds instead. Hopefully this would give me some winnings over time and a better chance of the big winnings. I feel that it is safer there than the banks and stock & shares. If the banking system goes tits up again, then i have been told that i would never loose my premium bonds as you would money in the banks./ I lost nearly £10,000 of my halifax shares when Lloyds screwed that up for me. Add my divorce to that equatiuon, you can see i have had it pretty rough and understand my need to protect what i have left.
Any advice is much appreciated.

You cannot remove money from a pension unless you are over 55 and then you are restricted to how much you can withdraw as cash and how much for an annuity to buy the pension you have paid into. You cannot move the money in a pension to a premium bond AFAIK.

When you say your financial advisor is it an independent financial advisor or one tied to Norwich Union?

Losing the value of shares that you never paid for in the first place is disappointing but that is what happens in the stock market (ups and downs).

You can buy Premium Bonds with savings, they are about as safe as you can get but the interest (ie the average amount you can reasonably expect to win as a percentage of those held) is not very high. But of course if you win above average they seem much better. But realistically you will not win much unless unless you own thousands of PBs.

As to your divorce, your ex may be entitled to part of your pension anyway! And of course you may be able to have some of hers.

McKneff

You cant get cash from your pension.

It is earmarked for your retirement, its not a savings account.

If we could do this, everyone who hit on some hard times would be doing it and then they would be living on a state pension, which atthe moment is about £108 a week, if it even exists in the future.

Linton

I think that even taking into account your recent stresses you are going OTT. This is could seriously damage your wealth when you come to retire.

Premium bonds would give you on average 1% per year. So they are pretty well guaranteed to lose value because of inflation. But you cant invest in them anyway. I guess the nearest to a minimal loss is a cash fund which you can invest in. A cash fund will currently return perhaps a maximum of 0.5% and a minimum of -0.5% annually.

How long have you got before retirement? If it's only a year or so then a cash fund may be appropriate. However if its more than say 10 years you should do much better by investing in a sensible range of funds.

You say you lost £10K on Halifax. I must ask why you had £10K in Halifax when your total investments seem pretty low. £10K in any one share would seem to me to be more appropriate for perhaps a £200K portfolio. By spreading your risk you are avoiding catastrophic losses.

What are you invested in now? What is your IFA suggesting?

BobQ

Linton wrote: »

You say you lost £10K on Halifax. I must ask why you had £10K in Halifax when your total investments seem pretty low. £10K in any one share would seem to me to be more appropriate for perhaps a £200K portfolio. By spreading your risk you are avoiding catastrophic losses.

?

I think what he means is that the free shares he got from demutualisation rose to these figures before they crashed. At least I hope that is what he menat because if he actually bought £10K of Halifax shares he has been taken even worse advice than he realised.

dunstonh

I have £35,000 in my pension with norwich union. as my trust and faith is a zero now, i was wondering about whether i could transfer that money and put it into premium bonds instead.

Thankfully you cant do that. The rules dont allow it and it would be a truly awful decision even if they did.

Hopefully this would give me some winnings over time and a better chance of the big winnings.

The average payout rate is less than inflation. You have to be very lucky to get more.

I feel that it is safer there than the banks and stock & shares.

Aviva are not a bank. They are an insurance company. Thankfully, insurance companies were required to improve their solvency requirements prior to the credit crunch and most modern pensions are unit linked and the assets ringfenced away from the insurer. So, safety shouldnt be a concern. Plus, you have the FSCS investments protection in the rare cases where there are issues.

If the banking system goes tits up again, then i have been told that i would never loose my premium bonds as you would money in the banks.

You would likely be losing money in real terms though.

I lost nearly £10,000 of my halifax shares when Lloyds screwed that up for me.

How did Lloyds screw that up? It sounds like you had £10,000 in a single share in a single sector that was heavily hit in the credit crunch/recession. If so, that is bad investing. You should never hold a single share to a larger value.

Any advice is much appreciated.

First thing is to try and understand issues and reasons why things happen. Not to go off like a scattergun doing things wrong because you dont understand.

Premium bonds are pretty poor value for money for most people. So, what attracts you to them?

Banks have a lot to answer for but most of the issues are investment banking and not retail banking. However, you should never seek advice from a bank. They employ tied sales agents. You should use an IFA if you need advice. Its cheaper and independents dont have sales managers telling them that if they dont hit targets they will lose their jobs. Plus, as mentioned, the pension wrapper has virtually nothing to do with banks.

atush

premium bonds- bad for large investments. good for 100 quid if you want a flutter (and keep your 100). I do this, and have already won back my stake plus have my original stake.

Pensions- good for tax relief and to keep silly people from spending what is meant to keep them in old age, today on silly things. Like the chippy down the pub.

Divorce. Want sympathy? forget it, as you may have very well (and statistically likely) to have been the cause of it. If you divorced and had to share the family wealth, it just means you didn't try hard enough to be married. and if it wasn't your fault, you had a bad lawyer and bad instincts. And should provide for your kids anyway.

If your pension with aviva isn't performing to your liking/expectations good news is, you have a few options to choose from (none of which are involve your pants).

Change the funds in which you invest, invest more, or transfer it to another pension with lower costs and funds you beileve in/trust.

tell_it_how_it_is

atush wrote: »

Divorce. Want sympathy? forget it, as you may have very well (and statistically likely) to have been the cause of it.

LOL, he probably wasn't looking for sympathy, but neither will he have been expecting to be blamed for causing it. By a complete stranger.

OP, no chance you can get at your pension cash, and even if you could, if you take me as an example, premium bonds would be a complete waste of time.

innovate

BobQ wrote: »

But realistically you will not win much unless unless you own thousands of PBs.

There's no guarantee you win anything at all, even if you have the max £30K in PBs. Your theoretical chances are higher but that's about it. Of course, luck might pick you, but then, it might not.

http://www.moneysavingexpert.com/savings/premium-bonds

Herongull

Perhaps you should do your own research on investments, then you would have a better understanding of risk versus possible rewards in relation to financial products. You would also feel more in control.

There are plenty of good books to help you get up to speed.

I don't have an IFA. I understand what sort of investments I buy, and why I am buying them.

Keep costs and commissions down, maintain a balanced portfolio, understand risk and correlation between different investments, never buy anything you don't understand and keep away from salesmen, IFAs and other parasites.

PS And the other posters are right - No, you can't move from pensions to premium bonds, and Yes, premium bonds are a lousy investment.