How does the growth of this old pension product compare with newer products?

Simon_Jay

Hi,

I have 5 old Royal London Pension plans which I stopped paying in to many years ago and they have been closed to any further payments. They are all in the Royal London Personal Pension Plan and 3 are with Protected Rights (not sure what this means?). There are 5 policies due to earlier transfer and related compensation.

It is a with profits product invested in the Royal London Open Fund which means that it has a bonus added year. I was thinking that this was quite a good plan being that the value remains static rather than changing with the markets, etc. However, I have been looking at the last couple of statements and wondered how the growth compares with newer products. The current value is £23,150 with a transfer value of £62,933. In 2016 the value increased by 2.68% and in 2015 the value increased by 2.5%.Should I be looking for better growth or is this average for a 'pay the money and have no input' product.

I know the value is fairly low but I want to open a new pension product shortly and will need to decide whether to transfer this in or leave it where it is. Thanks for any advice.

xylophone

"Protected Rights" are no more.

https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Pensions/Pensions_speedbrief_Protected_rights_abolished_from_6_April_2012

Looking at your other posts, I can't quite get to grips with your situation.

Are you a director of your own limited company?

xylophone

Have you obtained a state pension statement?

https://www.gov.uk/check-state-pension

You mentioned an Independent Financial Adviser in an earlier post - have you discussed all your pension arrangements with him?

Simon_Jay

Hi xylophone, thanks for coming back. Yes, I am a Director and shareholder of a limited company but I cannot reduce the base 30K salary (a requirement of the other Directors when I joined the company) which is not ideal.

Thanks

Simon_Jay

Yes I have checked the state pension and I have paid over the contributions required for full entitlement.

Only had initial meeting with IFA but his view was that I should start company payments to pension asap, invest the cash in S&S ISA's and forget about BTL. I have not taken this any further

xylophone

Only had initial meeting with IFA but his view was that I should start company payments to pension asap, invest the cash in S&S ISA's and forget about BTL

I would have thought that you should also discuss your old pensions with the IFA.

Has he not suggested a suitable provider and choice of investments for your new pension?

Simon_Jay

He did say that the next stage would be to look at what I already have, discuss goals and retirement expectations, and to identify suitable products, etc. However, this is now going to cost me money so just trying to do a little homework before I decide whether to go down this route.
Thanks

dunstonh

Yes, I am a Director and shareholder of a limited company but I cannot reduce the base 30K salary (a requirement of the other Directors when I joined the company) which is not ideal.

Not even using salary sacrifice? That still keeps you on a £30k entitlement but both you and the company gain through salary sacrifice.

He did say that the next stage would be to look at what I already have, discuss goals and retirement expectations, and to identify suitable products, etc. However, this is now going to cost me money so just trying to do a little homework before I decide whether to go down this route.

I would say, that in my experience, around 4 out of 5 modern contracts are better value (ie. cheaper) than legacy pensions. Most tend to break even for the initial advice cost within 3-5 years and then cheaper thereafter.