Old Allied Dunbar Pension

ffacoffipawb

dunstonh wrote: »

AD were a unit linked provider.

OK, fair enough.

dunstonh

Remember that you should never use the fund factsheet to work out the charges you are paying on an old style contract. The factsheet will always show the maximum.

e.g. provider had a pension that used that particular fund and charged that amount. 2 years later they came out with a version 2 that brought in a bid/offer spread but reduced the annual charge. 3 years later, they decided to come out with a version 3 product that had fund based discounts. 2 years later they came out with version 4 that removed all the initial charges and changed the fund based tiers.

All 4 of those could be using the same fund but getting different charges.

foreversummer

dunstonh wrote: »

Remember that you should never use the fund factsheet to work out the charges you are paying on an old style contract. The factsheet will always show the maximum.

e.g. provider had a pension that used that particular fund and charged that amount. 2 years later they came out with a version 2 that brought in a bid/offer spread but reduced discounted the annual charge. 3 years later, they decided to come out with a version 3 product that had fund based discounts. 2 years later they came out with version 4 that removed all the initial charges and changed the fund based tiers.

All 4 of those could be using the same fund but getting different charges.

Ok. That's a huge difference between the sheet the financial guy has sent me and the factsheet of the fund.

I've re-read the sheet he has sent me and it seems to be, on close reading, the funds that ex-Allied Dunbar pensions are able to move to. Therefore, can I assume, that this might not be the charge that is being charged at present?

dunstonh

Therefore, can I assume, that this might not be the charge that is being charged at present?

It could quite possibly be the case.

foreversummer

So, now I have received the transfer packed from Zurich. I wrote to them asking what the fees were on hubby's plan. I am trying to compare it to a transfer to HL where there is simply a platform charge and a fund fee.

Sorry if this is long-winded:

Capital/accumulation units: 3.5% per year of the value of the capital units.
Bid to offer spread: 5% of all payments (although he is not planning to putting any new money into this pension so presumably we can ignore this).
Annual Management Charge: 3/4 % per year of capital unit fund.
Expense deduction: £6.97 monthly.

I just don't understand the fees on this plan and how they compare to HL. Any pointers would be much appreciated.

The covering letter says "Please note that if the fund is transferred now, there will be a reduction in the capital unit holding. This is reflected in the transfer value figure quoted on the Current Value Statement". This threw me as it appears to be saying there are transfer fees. However, on the Current Value Statement the current total fund value is £19328.04 and the transfer value is £19315.36. The other former protected rights says the current transfer value of the former portected rights fund is always the same as the current fund value (5362.22).

It says guarantees, bonuses, guaranteed minimum pension, safeguarding, life styling, block/bulk transfers, market value reduction, protected or enhance tax free case do not apply to this plan. There is no GAR or life cover.

Foreversummer

Zanderman

foreversummer wrote: »

Capital/accumulation units: 3.5% per year of the value of the capital units.
Bid to offer spread: 5% of all payments (although he is not planning to putting any new money into this pension so presumably we can ignore this).
Annual Management Charge: 3/4 % per year of capital unit fund.
Expense deduction: £6.97 monthly.

The covering letter says "Please note that if the fund is transferred now, there will be a reduction in the capital unit holding. This is reflected in the transfer value figure quoted on the Current Value Statement". This threw me as it appears to be saying there are transfer fees. However, on the Current Value Statement the current total fund value is £19328.04 and the transfer value is £19315.36. The other former protected rights says the current transfer value of the former portected rights fund is always the same as the current fund value (5362.22).

It says guarantees, bonuses, guaranteed minimum pension, safeguarding, life styling, block/bulk transfers, market value reduction, protected or enhance tax free case do not apply to this plan. There is no GAR or life cover.

In case it's of interest (and maybe reassuring even if not much help) my old AD pension now with Zurich is very similar. Begun March 1990, not contributed to for some years, An October 2017 mailing following a request for full details gave virtually the same info as yours - same fund allocation, same breakdown of costs except monthly charge for mine is 6.88 not 6.97. Transfer value, at age 56, of a 53k pot is about 500 less than current value. But like yours the former protected rights part (17k) has no reduction for transfer.

caro69

Thank you Zanderman for that, seems that we have the same beast!

Up to a year and a half ago, the transfer penalty was huge. I don't have the figures to hand but thousands of pounds and we were advised many years ago not to continue to pay into it because of the high charges.

Unfortunately, that put us off pensions for a long time.

The Managed AP fund appears to have done well over the past years but I think it may carry too much risk with only six years to go (hubby will retire at 66)? That's why we are considering transferring it to a SIPP now and having a larger choice of funds. The only trouble that comes with that of course is choosing the correct funds! We don't want to be too cautious and miss out on growth, nor do we want to risk too much capital. Going to have to keep reading around the boards.

We have considered getting financial advice but I get the feeling that with such a small pot it's going to be difficult and expensive.

Thanks again.