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With profits Pension - what is it actually worth to me?
itm2
Posts: 1,516 Forumite
I have an old National Mutual with-profits pension from 1983 (since transferred to GE, then Windsor Life and now ReAssure). It has a guaranteed annuity option, with quite a good rate (my original policy document quoted £158 per £1000 if retirement taken at age 75, in 2035).
I'm trying to work out how much it will actually pay out at retirement, but am finding the annual statements confusing.
The last statement estimated a pension of £5,120 if retirement is taken at age 75 (i.e. in 2035), but I have no idea how they calculate this. I've If the annuity rate is £158 per £1000 then this would suggest a pension fund of £32,400, but my last statement showed the following values:
- Cash fund of £44,128
- Sum of bonuses already added: £39,000
- Transfer value: £51,186
I stopped making contributions in 2000.
I wrote to ask them how they calculated the pension projection, but their letter didn't answer it. They did confirm the original guaranteed annuity rates though, which simply don't correspond to their pension projection on my statement.
Can anyone explain what the above values mean, and how I can estimate what my pension might be in the future?
I'm trying to work out how much it will actually pay out at retirement, but am finding the annual statements confusing.
The last statement estimated a pension of £5,120 if retirement is taken at age 75 (i.e. in 2035), but I have no idea how they calculate this. I've If the annuity rate is £158 per £1000 then this would suggest a pension fund of £32,400, but my last statement showed the following values:
- Cash fund of £44,128
- Sum of bonuses already added: £39,000
- Transfer value: £51,186
I stopped making contributions in 2000.
I wrote to ask them how they calculated the pension projection, but their letter didn't answer it. They did confirm the original guaranteed annuity rates though, which simply don't correspond to their pension projection on my statement.
Can anyone explain what the above values mean, and how I can estimate what my pension might be in the future?
0
Comments
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Projections typically do not use the guaranteed annuity rate.
I would say a good guide is to take the transfer value, assume no more growth other than real terms and apply the GAR rate for your age against it.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
What's the relevance of the "bonuses already added" figure? Is it reasonably to expect that, if I don't touch the funds until the maturity date, I can add these bonuses to the quoted transfer value?0
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