NFU With Profits Pension Advice

Tabatha_Kitten

I have had a letter from NFU today saying that the With Profits pension is being withdrawn. I can continue to keep paying in but wont be able to make any changes to the amount I pay in future.

I only pay around £50 each month which is probably no where near as much as I should be paying in.
Am I better moving it elsewhere now so I have the option to increase my payments in future or should I just keep my payments the same until I can join the NEST scheme at work (when it eventually comes in for small companies) and then freeze it ?

dunstonh

I have had a letter from NFU today saying that the With Profits pension is being withdrawn. I can continue to keep paying in but wont be able to make any changes to the amount I pay in future.

That is very common for legacy or obsolete pensions. They close their doors to new business and increments but have to allow you to keep paying what you have.

I only pay around £50 each month which is probably no where near as much as I should be paying in.

It is about half what most pension providers today have as the minimum premium. So, yes, it is a bit poor.

Am I better moving it elsewhere now so I have the option to increase my payments in future or should I just keep my payments the same until I can join the NEST scheme at work (when it eventually comes in for small companies) and then freeze it ?

Depends on the terms of the existing pension and alternatives available. It would require an analysis of benefits and costs and not something anyone can say on an internet forum one way or the other.

Tabatha_Kitten

Thanks dunstonh.
Iam well aware that what Iam paying in at the moment is poor.
I do have a frozen defined benefits scheme as I worked 14yrs for a high street bank.
Since I left in 2002 I have only worked part time so a pension has not been top of my list of things to spend my money on.
I dont know much about pensions but I think what I was trying to work out is if an obsolete scheme still going to worth investing my pittance in or is it going to get put to the back of the shelf gathering dust so to speak - like those obsolete savings accounts paying 0.01%, or am Iam I likely to be better transferring to a more current scheme or waiting for the new government one to come out ?
Is anyone likely to want to spend time giving me advice if Im only going to be able to pay a small monthly premium ?

solentview1

Tabatha Kitten - members of my family have also received the letter from NFU Mutual, and I feel slightly aggrieved that NFUM are taking this action.
If you read the letter carefully, you will see that NFUM are using the Retail Distribution Review which takes effect on 31/12/12 as the excuse for changing the rules of the NFUM Personal Pension Plan. We (my family) have identical pension plans with four other providers, and they are all operated in accordance with HMRC rules. And incidentally, none of those other providers have changed their pension plan rules.
The HMRC rules have not changed and the Retail Distribution Review is actually about how financial advice is paid for, not how a personal pension plan is operated. So it is my belief that NFUM are out of order, and are (ab)using the RDR for their own ends.
I have posted in MSE about this matter, in a different thread, and also on another Personal Finance website, in the hope that the web experts might be able to comment. I also intend to contact the FSA and see what other action can be taken.
In the meantime, my view is that these pension schemes are extremely valuable personal assets intended to be operated over a long term, so I would suggest not taking any precipitate action until NFUM come clean and inform us as to why exactly they think that the Plan rules have to be changed.
Solentview

dunstonh

Tabatha Kitten - members of my family have also received the letter from NFU Mutual, and I feel slightly aggrieved that NFUM are taking this action.

Why are they aggrieved? it doesnt seem logical to feel that way.

If you read the letter carefully, you will see that NFUM are using the Retail Distribution Review which takes effect on 31/12/12 as the excuse for changing the rules of the NFUM Personal Pension Plan. We (my family) have identical pension plans with four other providers, and they are all operated in accordance with HMRC rules. And incidentally, none of those other providers have changed their pension plan rules.

They have no choice.

The HMRC rules have not changed and the Retail Distribution Review is actually about how financial advice is paid for, not how a personal pension plan is operated. So it is my belief that NFUM are out of order, and are (ab)using the RDR for their own ends.

You are wrong. The "old" NFU contract was not compliant with the RDR and all business put in place under an advice process post RDR could not use that contract. NFU retail their products under advice.

I also intend to contact the FSA and see what other action can be taken.

Firms have been trying to get the FSA to change its mind on RDR for over 5 years. MPs tried to get the FSA to change its mind. Why do you think they would listen to you? Especially as what you are arguing for is worse than the changes.

I would suggest not taking any precipitate action until NFUM come clean and inform us as to why exactly they think that the Plan rules have to be changed.

They have told you. You just choose not to believe them even though it is correct.