Challenge NPI with profits MVR?

david-h_2

I have a small with profits pension pot with NPI set up in the late 80's (£11,000) and have just received my annual statement.

I have been considering cashing it in, so as to get repairs done to the roof of my home. I phoned them earlier today, and was shocked to hear the market valuation reduction % they would charge for cashing in early.

This amounted to 37.5%!!! :mad:

Surely, this can't be correct (although they assured me it was)?

Does anyone know if there's any way of challenging this ridiculous percentage, or at least asking for justification?

Your_Hero

david-h wrote: »

I have a small with profits pension pot with NPI set up in the late 80's (£11,000) and have just received my annual statement.

I have been considering cashing it in, so as to get repairs done to the roof of my home. I phoned them earlier today, and was shocked to hear the market valuation reduction % they would charge for cashing in early.

This amounted to 37.5%!!! :mad:

Surely, this can't be correct (although they assured me it was)?

Does anyone know if there's any way of challenging this ridiculous percentage, or at least asking for justification?

No you won't be able to challenge it. This is how with-profit funds/pensions worked. Essentially what's happened is they've overpaid your profits to date and since the underlying assets of the fund have fallen (significantly from the looks of it), they have to implement an MVR to protect the long-term policyholders so that everyone gets their 'fair share'.

Normally, if you hold it until maturity there won't be any MVR.

david-h_2

Your_Hero wrote: »

No you won't be able to challenge it. This is how with-profit funds/pensions worked. Essentially what's happened is they've overpaid your profits to date and since the underlying assets of the fund have fallen (significantly from the looks of it), they have to implement an MVR to protect the long-term policyholders so that everyone gets their 'fair share'.

Normally, if you hold it until maturity there won't be any MVR.

Thank you for your kind adviceYour Hero.

Rather disappointing to read there's no way get them to even justify the reduction.

37.5% seems to be a huge devaluation on the assests they invested in. Some investments!!!

dunstonh

37.5% seems to be a huge devaluation on the assests they invested in. Some investments!!!

AMP UK nearly went under. They moved massively into gilts/cash like investments after the dot.com crash (which was around 43% stockmarket drop). AMP sold off Pearl, London Life and Pearl. Phoenix began to increase the equity content again but then along came the credit crunch/global recession.

So, whilst it is high, given what happened, it is in the ballpark for a poor quality WP fund.