Scottish Equitable Pension

dave23

[FONT=&quot]Hello, I have an old Scottish Equitable Group Personal Pension from just before stakeholders started. Current value is £44827, split as follows
UK Equity £22083
High Equity WP fund £15092
Terminal bonus of £7652

The original plan investments were UK Equity 50%, High Equity WP Fund 50%, annual charge is 1%. Considering how much was paid in to it, this plan has done very well over the years but the UK Equity is considered above average risk so should I consider switching funds or leave it alone for a few more years? I was also thinking about transfering it to a Aegon Retireready pension

I am 54 and currently paying into a DC scheme with my current employer and also have a defered DB pension worth approx £7000. I don't currently plan to retire before 67.
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dunstonh

but the UK Equity is considered above average risk so should I consider switching funds or leave it alone for a few more years?

UK equity is down 20% from its high point. So, pulling out of it now would crystallise that loss. However, if it was to diversify into other equity markets (US, European, Asia etc) then that would be viable.

I was also thinking about transfering it to a Aegon Retireready pension

Is that because Aegon are trying to encourage you? Put it this way, there are better and if you are going to the move the pension then you may as well do better than that.

dave23

No they have not been encouraging me to switch but they did write to me about closing the with profits scheme to future investments and changes to the terminal bonus rates but I am not quite sure what the impact of this means

dunstonh

dave23 wrote: »

No they have not been encouraging me to switch but they did write to me about closing the with profits scheme to future investments and changes to the terminal bonus rates but I am not quite sure what the impact of this means

So, how did you find out about one of the other current plans?
What about it appeals to you compared with other options?

dave23

The letter pointed me to the retireready site which does have some useful features and obviously promotes their other products so I had a look at the retireready pension.

dunstonh

I would look at your investments as they certainly need improving. However, I would be careful of moving to a new contract with Aegon. They wont have your interests at heart.

dave23

Would it be worthwhile going to see an IFA to review my pension arrangements and how much is it likely to cost?

dunstonh

You fund is just about big enough for a transactional review that would likely result in lower costs. There would be an adviser charge but the adviser could probably halve your annual charges. So, a step back to take two forward. Typical breakeven times on these is about 4-5 years (to recover the adviser charge). If you DIY you avoid the adviser charge but you need to do it yourself. Much like any job where you decide to either DIY or get someone else to do it.