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Pension advice please?

I have a pension started in 1988 now frozen for the last 10 years and a Stakeholder with Aviva which I have contributed for the last 10 years at £150 per month without any increase.

I'm 50 very soon and its time I got to grips with my pension situation. Would it be worth me seeing an IFA or should I simply contact Aviva and massively up my contributions?

Any thoughts?
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Comments

  • JoeCrystal
    JoeCrystal Posts: 3,250 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Before you do that, you need to decide just how much pension income you want. If your first pension is defined benefit then you would already know what you actually get. However if your required retirement income is much higher than your defined benefit pension then you would need to figure out just how much shortfall you need to make up.

    The fund requires to make up the shortfall and with a just short length of time may indeed require massive amounts of contributions. Have a look at a pension calculator like this one.

    Due to a decade of £150, I see that your fund value would have £18,000. Assuming that you pay the same amount for next 15 years, the income may be £2,819 per year and that is highly optimistic as the fund value can rise and fall depending on the market.

    To be brutally honest, you should get a grip of pension long time ago as only time is a real help when contributing. As it is, £150 back in 2003 is now worth £185-190 in 2010. So you see that ideally the contribution should be increased every year.
  • dunstonh
    dunstonh Posts: 118,599 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I have a pension started in 1988 now frozen for the last 10 years and a Stakeholder with Aviva which I have contributed for the last 10 years at £150 per month without any increase.
    Is the pension actually frozen, deferred or paid up?

    I'm 50 very soon and its time I got to grips with my pension situation. Would it be worth me seeing an IFA or should I simply contact Aviva and massively up my contributions?

    The aviva stakeholder is neither the cheapest or the best. Your timescale is such that an IFA can offer cheaper and/or better.

    As Joe says, its a shame your £150pm wasnt indexed. Good contribution for 40 year old in 2000 but its not that good in 2013 and not good for a 50 year old.
    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.
  • dunstonh wrote: »
    Is the pension actually frozen, deferred or paid up?

    Frozen I believe, just looked at the 2012 statement, there is 20k current fund value on this one.

    dunstonh wrote: »
    The aviva stakeholder is neither the cheapest or the best. Your timescale is such that an IFA can offer cheaper and/or better.

    As Joe says, its a shame your £150pm wasnt indexed. Good contribution for 40 year old in 2000 but its not that good in 2013 and not good for a 50 year old.

    Just checked this one, Im paying £160/month in, total fund value here just over 24k.

    Better contact an IFA by the sound of it.
  • atush
    atush Posts: 18,731 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    yes, given the size of those pots I would substantially increase your contributions. And ideally raise them every year
  • jem16
    jem16 Posts: 19,494 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    hnagra wrote: »
    Hi, if you still need advise on this matter than please do not hesitate to contact me

    If you have any useful guidance for the OP then please post it.

    Touting for business though is not allowed on MSE so please edit your post before it's reported.
  • GhIFA
    GhIFA Posts: 619 Forumite
    hnagra wrote: »
    Hi, if you still need advise on this matter than please do not hesitate to contact me, i am giving free guidance on these matters.

    Free? I'd be interested to see how that model works in the post-RDR world.........
    I am an IFA. Any comments made on this forum are provided for information only and should not be construed as advice. Should you need advice on a specific area then please consult a local IFA.
  • Filip
    Filip Posts: 54 Forumite
    Hnagra post reported
  • Hi again, I have seen an IFA he has collected the info from the two companies, I have in total £105K. Apparently the Phoenix Life has a 3.5% charge on it and should be moved, the Aviva as you guys suggested, is not ideal.

    In my mind here lies another problem, my first consultation with the IFA was free, if I wish to meet and discuss further it will be £500, any funds moved will be £2.5-3K more. Seems excessive to me, but I realise they have a living to make. I approached a further IFA who mentioned £300 for the second meet with a similar slightly lower fee for transfer.

    My own research suggests a SIPP may be best, but if I prefer the funds to be managed a Stakeholder. I will need to gain the info from the companies and clearly the Phoenix should be moved.

    So any suggestions? Could I pay for the findings, i.e. pay the £300/500 fee, and then invest myself? Alternatively, should I face the situation and go with the IFA? Or research and with a little help from you guy sand go it alone?





  • dunstonh
    dunstonh Posts: 118,599 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Seems excessive to me, but I realise they have a living to make.

    2.5-3k is at the upper end. You would expect around 1.5k as more typical.
    My own research suggests a SIPP may be best, but if I prefer the funds to be managed a Stakeholder.

    a stakeholder will likely be more expensive than what the IFA can offer (breakeven points are typically 2-5 years). A SIPP would depend on your investments.
    Could I pay for the findings, i.e. pay the £300/500 fee, and then invest myself?

    No. You are paying for the advice. The findings are the advice.
    Alternatively, should I face the situation and go with the IFA?

    Its almost certainly going to be cheaper than stakeholder. So, if that was one of your alternative options then the IFA would be better. The SIPP would depend on what you want.
    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.
  • atush
    atush Posts: 18,731 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    I would gowith an IFA, but a different one. As the charges suggested are about twice what I would expect.

    A SIPP is fine if A, you need one, and 2 you know enough about investments to run things yourself.
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