More than £85k with SJP single pension account?

solidpro

If you can put aside your dislike of SJP for this question, would anyone have a problem putting £100k or £200k with SJP in a single pension fund?

Question is in the context of risk of my money should SJP have issues with financial stablity, not a concern about the success or otherwise of their products.

Thanks

El_Torro

SJP don't own the money in your pension fund, they just administer it. This means that if SJP were to go bust the investments would still exist, they would just be transferred to another platform. It may take some time for you to access your investments / money but they would still be safe. As always the value of the investments would continue to go up and down.

The £85k protection is more relevant for money held in cash at a bank. Investments in the stock market don't have this kind of protection.

solidpro

But don't SJP and suchlike essentially create their own funds, which invest in other stuff and as a customer I'm invited to buy shares in those funds? Feels like I'm buying 'shares' in these companies funds which are putting in places they see fit. If their products (funds) share values drop to nothing, how is that transferrable to another platform?

Aminatidi

I'm simplifying massively but if SJP create their own fund and (for simplicity) it's just a SJP branded global tracker then even if SJP go bust once all the dust has settled the fund should still be worth the sum of its parts.

El_Torro

solidpro said:

But don't SJP and suchlike essentially create their own funds, which invest in other stuff and as a customer I'm invited to buy shares in those funds? Feels like I'm buying 'shares' in these companies funds which are putting in places they see fit. If their products (funds) share values drop to nothing, how is that transferrable to another platform?

SJP do run their own funds, and the fund managers are employed by SJP. Those fund managers don't invest your money in SJP though, they invest in companies that are listed on the stock market. Plus bonds, gilts, etc... depending on what your fund is. For this reason most of your money is safe if SJP  go bust. You'll only lose out if the company that the fund manager has invested in goes bust. This is always true, whether or not SJP go bust.

For example: If your SJP fund invests 100% of its money in Shell (they won't, this is just an example) then the fund will go up and down depending on Shell's share price. If Shell goes bust then you've lost all your money. If SJP goes bust and Shell is OK then the fund just gets bought out by another fund and you still own the same number of Shell shares as you did before.

Albermarle

solidpro said:

But don't SJP and suchlike essentially create their own funds, which invest in other stuff and as a customer I'm invited to buy shares in those funds? Feels like I'm buying 'shares' in these companies funds which are putting in places they see fit. If their products (funds) share values drop to nothing, how is that transferrable to another platform?

Many investment platforms have their own brand funds. HL, Fidelity, Vanguard etc+ all the traditional pension providers eg Scottish Widows, Aviva etc.
It's normal.

ColdIron

An SJP pension will have 100% protection. This is common for many pensions

• For investments in pensions and UK bonds you may be entitled to 100% of your claim with no upper limit, in the unlikely event that we're unable to meet our financial obligations to you.

https://www.sjp.co.uk/about-us/how-safe-is-your-investment

Albermarle

An SJP pension will have 100% protection. This is common for many pensions

Although as I understand it this has never been tested in reality, and if a number of pensions funds were in trouble at the same time in some kind of real financial meltdown, then.....

Extremely unlikely to happen though of course.

dunstonh

Insured internal funds should be 100% FSCS protection (although unit linked funds have never tested it).  Externally managed insured funds is where there is greater unknown as providers vary on their thoughts on this as again it has never been tested.