LGPS AVCs - Advice sought please

hyubh

Scruffycat59 wrote: »

I contribute to the LGPS and to top it up pay AVC to Prudential. I have just received by annual statement of AVC from Prudential and am horrified at the cost of the monthly AMC I have paid out. This amount seems to escalate each year. I am paying over 10% to them. This means over one months contributions going to prudential profits.

Hmm, I doubt that:

http://www.pruadviser.co.uk/content/efactsheets/79311/112185/120775/

Although, 'over 10%' of what...? The way you phrase things makes it sound like the charge is made against your current level of contributions, when in reality it is against the value of your investments (assuming we're talking about unit-linked funds - with-profits is slightly different). In principle, someone might build up a large fund then decide to cut their contributions sharply... in which case the management charge as a percentage of their current contribution level will be very high.

bigadaj

Scruffycat59 wrote: »

I contribute to the LGPS and to top it up pay AVC to Prudential. I have just received by annual statement of AVC from Prudential and am horrified at the cost of the monthly AMC I have paid out. This amount seems to escalate each year. I am paying over 10% to them. This means over one months contributions going to prudential profits. Does anyone know of alternative schemes I could use. I think I would rather cancel these contributions altogether and have a little more money to live on now. By the way before any of you high flyers get too carried away, I am one of this countries lower paid people.

I'm no fan of financial services charges but what you've quoted sounds unlikely.

State some actual numbers in terms of the total value of the avc pot, your contributions and charges and some explanation may be apparent. Charges are normally calculated on the total pot rather than teh contributions, so is it the case that you have a pot of say £5000, are contributing £50 a month and charges are £50 a year. In that case the charges would be nearly 10% of your contributions but they are charged on teh whole pot size! whether you contribute or not, so actually 1%.