The Prudential WP fund performance

Judwin

I finally got my yearly statement (5 months late). The basic figures are :

Main fund:
2006-7 Contributions 12 * £455 monthly
2006 Transfer Value £81910 + £17647 final bonus = £99558
2007 Transfer Value £90192 + £29061 final bonus = £119253

Protected Rights Fund :
2006-7 Contributions Opted back into S2P/SERPS, so no Protected rights contributions.
2006 Transfer Value £32159 + £7722 final bonus = £39882
2007 Transfer Value £33222 + £12338 final bonus = £45551

I've tried to work out the performance. I think both the Main and PR fund parts (excluding the bonus) have grown by approx 3.3%. This appears to tie in with the published rate of 3.5%. I expect the difference is due to variable dates on which monthly payments arrive due to weekends and bank holidays?

The final bonus increases the rate on both parts to around 14%. As I understand it, the final bonus isn't fixed, and can be increased or reduced retrospectively. However, If I were to have transferred out in February (the date of the statement) that's the value that I would have recieved - The isn't a MVR in place at the moment AFAIK.

My medium term plan is to move out of the Pru into a SIPP with H-L but I'm not intending to do it just yet because :

1) I'm hoping for a windfall from the Pru when they sort out their 'orphan assets'. This may take a year or two, and may only be £1000.
2) H-L can't take the PR portion yet - perhaps after December.
3) I'm playing with my SS-ISA to get familiar with OEICS so hopefully I've got more experiance before I jump in with my pension pot.
4) If the Pru can return another 14% this year, then I think I'd have to be quite agressive with my find choices to exceed that. Doesn't seem to be a bad choice for a fire and forget pension at the moment.

Anyway, that's my experiance for the year to Feb 2007. Unless i've missed something, I can't see where all the doom and gloom about WP funds comes from - at least over the past year.

Cheers,
Judwin

dunstonh

I finally got my yearly statement (5 months late). The basic figures are :

Pru bonus statements are typical for April/May issue as they dont announce their final year bonus at the start of the year.

1) I'm hoping for a windfall from the Pru when they sort out their 'orphan assets'. This may take a year or two, and may only be £1000.

And will you have lost out on more than £1000 if you delay? Quite possible with your fund value.

2) H-L can't take the PR portion yet - perhaps after December.

Maybe. Maybe not. Maybe never. Still no news.

4) If the Pru can return another 14% this year, then I think I'd have to be quite agressive with my find choices to exceed that. Doesn't seem to be a bad choice for a fire and forget pension at the moment.

.....Unless i've missed something, I can't see where all the doom and gloom about WP funds comes from - at least over the past year.

The Pru and NU are exceptions as they both still operate viable with profit funds. The only WP funds that still exist on my books are NU and Pru and that is because there is no justification for taking them out. They have both been returning in excess of double digits and at annual management charges of 1% or less.

Expect the annual bonus to remain relatively low and the bulk of returns to be reflected in the final bonus. Some of Pru's plans do allow for part switching into unit linked funds and some of them include external funds. You may be able to build the portfolio within Pru cheaper than HL.

Judwin

dunstonh wrote: »

Pru bonus statements are typical for April/May issue as they dont announce their final year bonus at the start of the year.

I'm pretty sure that previous years it's arrived in Feb/March. I could be wrong about that though.

dunstonh wrote: »

And will you have lost out on more than £1000 if you delay? Quite possible with your fund value.

Possible, but there is a chance that the windfall could be £2K or £3K. Or nothing.

dunstonh wrote: »

Maybe. Maybe not. Maybe never. Still no news.

True, but there have been murmurings about the Government waiting till after some report or other which is due late this year. Others have mentioned a possible decision in December. If there is no news by the new year, then time to re-assess.

dunstonh wrote: »

The Pru and NU are exceptions as they both still operate viable with profit funds. The only WP funds that still exist on my books are NU and Pru and that is because there is no justification for taking them out.

So are you saying that these 2 WP funds are good on their own, or are you using them as funds in the 'cautious' part of customers portfolios (risk grades 2.0-2.3? on your scale), augmented by a few more adventurous funds (risk grades 3,4 & 5)?

dunstonh wrote: »

Some of Pru's plans do allow for part switching into unit linked funds and some of them include external funds. You may be able to build the portfolio within Pru cheaper than HL.

This is something I might investigate - Might be useful eventually for the PR part if I shift the non-PR to H-L. We used to have a Pru office here in Yeovil where I could stroll in and ask questions. It closed about 10 years ago, and moved first to Dorchester, then to Barnstable. I think the local office is now in Bombay/Mumbai. Anyway - cheers for the pointer.

Judwin

dunstonh

Possible, but there is a chance that the windfall could be £2K or £3K. Or nothing.

Yes. Its a pain not having a crystal ball sometimes. However, £2k is only 1.6% of your pension. You can get that sort of movement in a week.

So are you saying that these 2 WP funds are good on their own, or are you using them as funds in the 'cautious' part of customers portfolios (risk grades 2.0-2.3? on your scale), augmented by a few more adventurous funds (risk grades 3,4 & 5)?

Would I choose to invest in them? No. If I was cautious and wanted some element of capital security, then yes, both [CG]NU and Pru WP funds are still viable options.