Help with small pension (Serps)

stulaunch

I have a small pension, which was my contracted out, serps, pension

It's with Standard Life and I am wondering if it's worth transferring it to my Sip.

I called a year or 2 ago and asked about the guarantee on it. I've written down that they told me it had guaranteed growth of 5% a year, but looks like it maybe 4%.

Why has the pension, if this is the case, decreased by a few pounds on last year, this I dont understand?

This is what |I have just been sent.

Any help would be appreciated.

Thank you.

  

Your pension plan Value at 31 July 2023 £19,454.42

Last year's value £19,458.08

Retirement value at 31 July 2023 £19,969.20

 

This is the breakdown of funds

Standard Life Managed Pension Fund FA £11,694.35     58.68%

Pension With Profits Fund W1 £8,234.44                          41.32%

 

About your with-profits investments

The payment from your with-profits investment could include a final bonus. The amount of any final bonus depends on the performance of the with-profits fund, the deductions we make and the growth in the unit price since your payments were made. On 31 July 2023 we would not have paid a final bonus.

Your with-profits guarantee Your plan guarantees a minimum payment from any part of your with-profits investments made more than five years before you retire, as long as you take your pension benefits on the retirement date that was selected when your plan started. You may also be able to benefit from this minimum payment if you take your pension benefits earlier or later than your planned retirement date in some circumstances. The actual amount of the guarantee on your retirement date will depend on any growth in unit prices. We aim to increase the amount that’s guaranteed. Each year, we set the growth rate for unit prices, and the growth rate we set on 1 February 2023 was 4.00% a year. The growth rate includes 4% a year that’s guaranteed. I This guarantee will apply to the part of your with-profits investments created by any future regular payments, any single payment, transfer payment or fund switch made more than five years before your originally selected retirement date. If the guarantee terms don’t apply to your payout, then: · we could reduce the with-profits unit price. We would only do this if your with-profits investment was worth less than the guaranteed minimum amount · the amount of final bonus could be less than if the guarantee terms apply

You’d lose this guarantee if you transfer out to another provider.

 

 

MallyGirl

I expect there are fees being charged

dunstonh

I called a year or 2 ago and asked about the guarantee on it. I've written down that they told me it had guaranteed growth of 5% a year, but looks like it maybe 4%.

The guaranteed growth rate is often quoted gross of charges and it is 4% gross.  It hasnt been 5%.  So, it would be a bit lower than the headline figure.

Why has the pension, if this is the case, decreased by a few pounds on last year, this I dont understand?

Do you have multiple funds?    The guaranteed growth rate only applies to the pre 2000 With Profits fund.

This is the breakdown of funds
Standard Life Managed Pension Fund FA £11,694.35     58.68%
Pension With Profits Fund W1 £8,234.44                          41.32%

There you go.  Multiple funds.

Albermarle

Standard Life Managed Pension Fund FA £11,694.35     58.68%

If you check back you will almost certainly see that this fund has decreased in the last 12/18 months ( like most investments)

stulaunch

Thanks for the comments. 
So If I transfer this into my sipp, It wouldn't be a foolish thing to do?

Albermarle

stulaunch said:

Thanks for the comments. 
So If I transfer this into my sipp, It wouldn't be a foolish thing to do?

It would depend on what you invested in when it arrived in the SIPP. Your current SL investments together are pretty static but at least they have not gone down in the last 12 months , which many have.

QrizB

stulaunch said:

Thanks for the comments. 
So If I transfer this into my sipp, It wouldn't be a foolish thing to do?

It also depends on what other pension investments you have. If youve got half a million stashed away somewhere else or a 20k pa DB pension entitlement, what you do with this scheme is less important than if it's the only thing that you have other than your state pension.