Friends Life Pension - Lifestyling

Imnoexpert_2

I have a pension with Friends Life. On checking my statement I discovered they had started Lifestyling me (moving my money from one fund to another in the last few years to reduce risk) a year early and despite my having told them of the error when they wrote to me earlier in the year.

I wonder if this has happened to others? If you are with FL I suggest you check.

On looking into this I'm now unclear as to what exactly the lifestyling is. My original booklet says the default is to move funds to UK Index linked Gilts and in the last 3 years some into cash. The error nade by FL on my account has led to them selling higher risk funds and moving them into a UK index fund I hold. I am pressing FL for answers, but I am losing confidence in the company.

These problems are really pushing me in the direction of SIPPs - at least mistakes will be down to me then!

Linton

Imnoexpert wrote: »

I have a pension with Friends Life. On checking my statement I discovered they had started Lifestyling me (moving my money from one fund to another in the last few years to reduce risk) a year early and despite my having told them of the error when they wrote to me earlier in the year.

I wonder if this has happened to others? If you are with FL I suggest you check.

On looking into this I'm now unclear as to what exactly the lifestyling is. My original booklet says the default is to move funds to UK Index linked Gilts and in the last 3 years some into cash. The error nade by FL on my account has led to them selling higher risk funds and moving them into a UK index fund I hold. I am pressing FL for answers, but I am losing confidence in the company.

These problems are really pushing me in the direction of SIPPs - at least mistakes will be down to me then!

Lifestyling involves gradually moving your investments into safer but less lucrative areas as you approach retirement. It is most appropriate when you plan to buy an annuity. You dont want to have your wealth halved should the next crash occur just before you retire when its too late to take advantage of the upturn. Starting it a year early isnt that significant as its a gradual process spread over perhaps 5 or more years.

dunstonh

I have a pension with Friends Life. On checking my statement I discovered they had started Lifestyling me (moving my money from one fund to another in the last few years to reduce risk) a year early and despite my having told them of the error when they wrote to me earlier in the year.

They use the selected pension age as the trigger for starting the risk reduction process. Did it start early because the selected age doesnt currently match with your plans? (if so, the selected age can be amended at any time). There are also different lifestyling frequencies depending on your plan version.

These problems are really pushing me in the direction of SIPPs

None of which offer lifestyling. So, you would need to do it yourself.

bigadaj

Whilst a year might not be a lot in terms of a pension fund it can no doubt have significant effects. Just look at the last year and the comparison between returns on equities and cash or bonds, even with a small amount of funds being moved from high to low risk asset classes that part of the fund could be down at least 10%.

OP have you raised this as a complaint, I would assuming that this is friends life's fault rather than a change in your plans, as the effect could have been significant.

Imnoexpert_2

dunston
Neither they nor I know why the started the Lifestyling a year before the designated date. They also did not put it right when I picked it up 6 months ago and told them.

I appreciate that SIPPS would not have lifestyling but I think I - maybe with an IFA could manage it.

Linton
Thanks. It wasn't the Lifestyle concept I didn't understand - just how this particular scheme was implementing it.

My issue here is that people place enormous trust in Pension Companies and many people don't check up on things like I now do. This was an error I picked up - relatively minor, but what about all the back office stuff about funds, charges etc that are too complex to check? The note accompanying statements are very poor and don't explain the terms used in the documents

FL have acknowledged the error and will put it right, but some weeks on can't explain why the adjustments were made as they were (probably someone can/will just not the help desk or the complaints dept). Looking at my 15 year old paperwork I that the default option described for lifestyling was not used - so perhaps this is a second mistake? They are going to send me a leaflet on Lifestyling but I fear that won't answer my query.

I have my teeth in it now so I will sort it out! I just shouldn't have to ! To be honest I am surprised this could have happened.