Poor Pension Performance

whizzing

My husbands Personal Pension with Scottish Provident has only gone up 3% in the last year. He no longer contributes very much to this pension as he has others but he has had this one for a long time and there is quite a lot of money in it so only going up 3% is a bit of a blow as he is saving hard for his retirement. How can he find out why it has gone up so little? Should he be asking questions like what % they take for managing it etc. What other questions should he be asking?

dunstonh

How can he find out why it has gone up so little?

Pensions do not make or lose money. The investments within the pension do that.

If it is stockmarket based, then 12 months from march-may last year didnt have great returns due to a correction in may/june which saw markets fall 10-15% before recovering later in the year. 12 months from june onwards has seen very high returns with 10-20% being closer to the mark.

If it is fixed interest based, then the last 6 months hasnt been great with many fixed interest funds standing still or dropping back a bit. Not unexpected considering where we are in the cycle.

If it is portfolio based, then you should have got double figures on most risk profiles at any point from last year.

My guess it is a with profits fund and as Scot Prov is basically closed for investment business it isnt a desirable place to be.

What other questions should he be asking?

Its an an investment. It needs to start being treated like one. Currently it is in an obsolete product from an obsolete provider (unless there are gauranteed annuity rates on it). It needs reviewing and compared against modern personal pensions with a modern fund range. Assuming the modern alternatives are better, then a better investment spread can be put in place offering greater potential for the future.

You will find Scot Prov will tell you nothing other than actual data. They are not allowed to offer opinion or comment. You would need an IFA to do that as they are the only ones authorised at this time to give advice on Scot Prov products.

EdInvestor

If the pension is invested in the With profits fund, does it have

a) a 3% guaranteed investment return
b)a guaranteed annuity rate at retirement? And if so, what is the rate and when will your husband retire?

It might be best to leave it where it is.You need to give more info.