Pension plan performance - year on year...is this a good performance?

Icterinewarbler

I have never contributed into it with voluntary payments, other than what has been paid in via national insurance, it originates from 1989, a 'contracted out of SERPS' personal pension.  It has a reasonable lump sum value but not sufficient to provide a cost-of-living income in retirement, so probably best bet will be some sort of drawdown once I cash it in.

Bostonerimus1

Icterinewarbler said:

I have never contributed into it with voluntary payments, other than what has been paid in via national insurance, it originates from 1989, a 'contracted out of SERPS' personal pension.  It has a reasonable lump sum value but not sufficient to provide a cost-of-living income in retirement, so probably best bet will be some sort of drawdown once I cash it in.

Do you have other pensions and retirement investments.

Mothman

I have a Prudential With-Profits pension where SERPS contributons were stopped in 2011. Looking at the statements the growth from March 2012 to March 2024 was 6.18%pa after all charges. I benchmark it against VLS60 and as a comparison that would have returned 6.53%pa over the same period after allowing 0.25%pa for a platform charge. As you would expect the With-Profits returns have been less volatile.

I always agonise each year about whether to transfer out but have kept it as its asset allocation is a bit different to what I hold elsewhere and I've only a couple of years to go until the selected retirement date when I can guarantee no MVR. Hope this helps.

Albermarle

Icterinewarbler said:

I have never contributed into it with voluntary payments, other than what has been paid in via national insurance, it originates from 1989, a 'contracted out of SERPS' personal pension.  It has a reasonable lump sum value but not sufficient to provide a cost-of-living income in retirement, so probably best bet will be some sort of drawdown once I cash it in.

Just be aware that cashing it in ( basically withdrawing it all one go ) and drawdown( taking it gradually) are two different things, so not to be confused.

Icterinewarbler

@Albermarle - yes thanks, I'm aware of the difference between drawdown (the one I'd choose) over one lump sum (liable for tax).

@Mothman - thanks. Likewise, I'm tempted to leave it there for the guaranteed zero MVR.  Very difficult to figure out what the MVR would be for an early transfer/drawdown/other, as it's calculated on the day of actioning the request and customer service claim they can't provide any estimate except on the day they process the request (it's up to the policy holder to call in, ask about the final MVR and cancel on that exact day if they are not happy with it).  

@Bostonerimus1 - yes, another small private pension.

Albermarle

 yes thanks, I'm aware of the difference between drawdown (the one I'd choose) over one lump sum (liable for tax).

Whether you take it all in one go, or gradually/drawdown, then 25% is tax free and 75% is taxable income. There is no difference.

The difference normally is that taking all the 75% at once/in one tax year, can mean you pay more tax as for example it might make you a 40% taxpayer that tax year. Whereas taking it gradually can avoid this , although a lot depends on what other taxable income you have at the time.