NPI/Pearl Pension Dilemma

Matthew1485

Hi
Im 55 at Christmas and have a Self Employed With Profits pension plan originally taken out with NPI but now, after years of heartache is with Pearl. I have other pensions which I am happy with at present.

My problem is that Pearl' approach (and it has been for quite a few years now) is - quote "not to add any new annual bonuses, but to allocate additional returns by way of a final bonus instead.

It has a transfer value of approx. £15k and a guaranteed annual value in 2027 of £9,300 PA.

Any ideas on what to do - I've thought about a SiPP or something?

Loughton_Monkey

????

In 15 years (2027) you will be 70

A typical annuity rate for a 70 year old is 6.6%

To buy an annuity of £9,300 for a 70 year old therefore costs about £141,000.

You have a transfer value of £15,000.

Tell me which SIPP will guarantee you a 16% compound interest for the next 15 years.

Any ideas on what to do

Absolutely nothing.

Matthew1485

Hi

Thank you - why didn't my IFA put that simple explanation around it. Maybe time for a new IFA!

Appreciate the response.

dunstonh

My problem is that Pearl' approach (and it has been for quite a few years now) is - quote "not to add any new annual bonuses, but to allocate additional returns by way of a final bonus instead.

That is how most with profits fund have moved.

why didn't my IFA put that simple explanation around it. Maybe time for a new IFA!

Are you sure you have the right figures? Pearl had guaranteed minimum maturity values on some of their plans but they are not common on NPI plans. Only Section 32 buy out bonds are likely to have them.

Did you pay your IFA to analyse your pension and give you a report? If so, change your IFA. However, if you havent asked them to do this then you shouldnt expect them to answer it that way.

Daniel_Elkington

I've seen these before, quite a few actually.

In the four I've seen over the last year it would appear that they haven't been paying bonuses and are directing any gains to satisfy the future incomes they have guaranteed.

Your fund value will unlikely increase by more than 2%, if at all, during the time to retirement. However if you move they generally need annual growth of 15-25% in order to provide a pot that will pay it out.

To be honest I have massive concerns about these pots as I'm not entirely convinced that Pearl will have the funds to pay out all of these stupid guarantees.

Interestingly one of their directors is tied in with the Conservative Party so I'd vote Tory if you want to ensure that if it does go belly up then there will be some political pressure to sort it out!

ffacoffipawb

Daniel_Elkington wrote: »

To be honest I have massive concerns about these pots as I'm not entirely convinced that Pearl will have the funds to pay out all of these stupid guarantees. !

GARs should have been already reserved for.

Interestingly one of their directors is tied in with the Conservative Party so I'd vote Tory if you want to ensure that if it does go belly up then there will be some political pressure to sort it out![/QUOTE]

Anyone with any understanding of finance, or any understanding of anything really, should vote Conservative. Labour lives in cloud cuckoo land.