Contracted Out SERPS - Can i make them work better

Charmer123

Hi

I currently have my contracted out SERPS invested with Royal London.  I receive an annual valuation statement but because the figures are so small, i have never really taken much notice of it. Recently ive been looking at my finances in more detail and im wondering if i could get my investment to work harder, possibly by transferring out. Does anyone have any evidence on what i could or should do. My work based pension is DB so i cant transfer it into that.

Info taken from the statement

422.510 units invested in Royal London United Assurance Managed 1 Fund.

Chosen Pension date 01/05/2039 (I didnt choose this but it will be when im 65)

Your pension pot maybe worth £7330 buying an annual income of £321 (£321 a year isnt going to go far!)

Policy Value @ 31/05/21 - £6765.23

Current Charges 1.05%

Thank you.

dunstonh

Your pension pot maybe worth £7330 buying an annual income of £321 (£321 a year isnt going to go far!)

Ignore the figures on the projection. They are synthetic, shown in today's spending power and artificially lower than what is likely. 

 

Chosen Pension date 01/05/2039 (I didnt choose this but it will be when im 65)

Also ignore that as its just what the plan is set currently at to show you the projections to.  You can take it earlier or later.  Its not cast in stone.

Current Charges 1.05%

You can get less than that nowadays.  Although your fund value on this is very low.  RL's pricing gets better on many of its plans as you get the value higher.  e.g. more than halving that once over around £25k.

Maybe a simple robo-provider solution would be better.  Your cost savings are going to be around £16-£20 a year.  However, be on guard as some will actually cost you more.

Albermarle

Also be aware that it is not relevant anymore that it was originally funded by you opting out of SERPS for a period.
It is just a DC ( Direct Contribution ) pension like many others .

You could consider starting new contributions to it . Pensions are a tax efficient way of saving for retirement as contributions attract tax relief.
Now you are lucky to have a DB pensions at work . However if you wanted to retire early at some stage , taking the DB pension early means a reduced pension . You can use the DC pension to fund your early retirement , before taking the DB pension, as just one possible idea.

Or you could transfer this pension to a new provider and start making new contributions to that . With this relatively small amount of money the provider and the charges are not that important , but new regular contributions would make a significant difference to the end result.