AVC charges

5mithster

I had to put money into an AVC, because I couldn’t transfer all the money I received from a mis-sold private pension into my company pension. I haven’t put any more into it as I put money into my company pension. Now, the annual charges for my AVC are higher than what I’m gaining from what it’s making. So, I am losing money each year.
How can this be right and what should I do?
Confused.

Marcon

Do you mean an AVC attached to your company pension, or what used to be called a Free Standing AVC (and has now morphed into a personal pension)? If the latter, and the fund performance has been dire year on year, transfer to a fund with lower charges and with a better likelihood of good performance going forward. If the former, talk to the trustees and ask if they plan to review.

Do remember, though, that most investments go through the doldrums - 'up' is not the only way! In years when all markets perform poorly, your AVC won't be exempt from the same problems.

dunstonh

Now, the annual charges for my AVC are higher than what I!!!8217;m gaining from what it!!!8217;s making. So, I am losing money each year.

Whilst AVCS are largely old fashioned, I doubt you are losing more than you are in charges unless you have put it all on a deposit fund.

How can this be right and what should I do?

What are the charges?
What are the funds you are invested in?

usually with threads like this we find out the fund hasnt been going down and the person is just looking at a short term period (similar to the one in the early part of this year) when values fell and not looking at the overall period when values rose.

5mithster

Ok guys, thanks.
£3500 was left over which I couldn!!!8217;t transfer, so I was told that I had to put it into an AVC.
The annual charges are £10.50 but the return is only £10.
Not much of a loss but I am only 46 and plan working until government pension age.
Also it still counts as a loss and I think there could be a better policy for me somewhere.

kidmugsy

5mithster wrote: »

The annual charges are £10.50 but the return is only £10.

In my experience an AVC offers you a range of funds to invest the money in. Which fund did you chose?

dunstonh

The annual charges are £10.50 but the return is only £10.

So, the charge was 0.3%. That is very low.

The return is subject to investment returns. You get good periods, poor periods and nothing periods. You average them out.

Also it still counts as a loss and I think there could be a better policy for me somewhere.

Unless you take a step back and try and understand investments, you will be destined to changing your pension provider frequently moaning about losses and charges without actually understanding why.

If you dont know how it works, how will you know if the alternative is better?

Please answer the questions earlier in the thread and the additional one telling us what period you think you lost £10.50?