Help

Rollingonandon

Hi all, originally took out a pension mortgage. Changed mortgage but kept the pension going. I think it was originally with Scottish Amicable but now with Prudential.
Originally the pension end date was on my 60th birthday. I will be 65 this year.
The pot has 2 policies. One is a cash pot with £54054.
The other pot has £38698 and is invested. The invested pot has grown since April 2018 to today by £3299.
I have only now started to look at it. And I know that was stupid. I have  spoken to the prudential rep about putting the cash pot into investment. He said that I could and there wouldn't be any charge. As my knowledge is nil about pensions I would like a bit of advice. Are there any pitfalls with putting the cash part of pension into investments? Are prudential a good company to stay or would i be better off with someone else. Thanks for any help.

cfw1994

No advice here - for that you need regulated financial advisors, ideally independant
Plenty of useful guidance though!
"Are there any pitfalls with putting the cash part of pension into investments?" 
Of course!  Any investment carries some risk, & the world is clearly a bit wobbly right now.    

Are Prudential any good?   I have no practical experience.  Do you know what their total costs are?   You suggest the investment has grown under 10% over 3 years, which is not too impressive really.

One thing missing here is when you might want to draw on these funds. 
If it is in the near future, maybe draw from the cash portion.  If it is a 5-10+ year timeline, then (generally speaking) you are perhaps better off moving into a fund.   The 'least risky' funds might be global trackers of some sort, in my opinion.   
Vanguard do some very low cost investment things, including pensions, but you will be managing it yourself.  That said, it sounds like the Pru haven't exactly been guiding you much!

Rollingonandon

Thanks, I know investment can fall as well as make me a millionaire. Ive no idea what prudential charge, but will ask. I Am thinking about not touching pension for 3 years at least. But not much longer than that. Will have a look at Vanguard. Thanks again.

El_Torro

You're asking some pretty big questions in this thread. cfw1994 has had a stab at answering but really to get good guidance from this forum I suggest you try to ask some more focused questions, or at least give us some more information. For example:

Do you want to invest your pensions yourself or are you happy letting someone else do it? If you want to do it yourself then great, but you'll probably need to do some reading up on the "right" way to invest, as investing incorrectly could cost you a lot of money, and actually make you worse off than leaving all your money in cash. If you're happy to have less control over your investment decisions then leaving your investment with Prudential may not be a bad idea. Just pick a suitable fund and go for it. 

Seeing an IFA is often a good idea for someone with lots of cash who doesn't know how to best utilise it. Although if all you have is a pension pot worth less than £100k then I'm not sure it's going to be worth seeing an IFA. They'll charge you so much to make it worth their while that this'll seriously eat in to your long term returns.

You say you don't want to touch the pension for 3 years. After 3 years are you going to convert it to cash and spend it all? I assume not. In which case you're probably going to have a big chunk of your pension invested for quite a few years, making the move from cash to investments more attractive.

Rollingonandon

Thanks El_Torro. I did speak to someone last week. He said there set up charge was 6%. Have looked the company up online and they seem to be very expensive. As I hopefully won't need to start using this pension for a few years was just looking to let it grow a bit. As you said about an IFA, they would probably cost the first years growth on the pension.

Dazed_and_C0nfused

St James's Place by any chance?

If so read some threads on here about them before doing anything else.

Rollingonandon

I didn't know if I could mention any names, but yes. I googled them the minute I got off the phone.

dunstonh

Thanks El_Torro. I did speak to someone last week. He said there set up charge was 6%.

The average according to data collected by the FCA is 1.8%.  With your figures, probably along the lines of 2%. 

I didn't know if I could mention any names, but yes. I googled them the minute I got off the phone.

Not quite the most expensive distribution channel in the country. There are some that charge 7%.  SJP are not independent either.   You should be looking at around 2% as a ballpark.

cfw1994

Rollingonandon said:

I didn't know if I could mention any names, but yes. I googled them the minute I got off the phone.

If I had the worlds biggest barge pole, I wouldn’t touch SJP with it!
I suspect you should speak with an IFA....but find a local truly independent IFA: SJP are NOT independent.

Rollingonandon

Thanks, it's good to know what set charge I should be looking at.