Scottish Amicable Endowment - Payment Of Further Bonus

dunstonh

Eric101 wrote: »

When I challenge Martin Walker Chief Executive’s Office Prudential UK & Europe regarding the actual returns on my Pension Pot (9.5%) and Prudential’s Claimed investment returns (105.5%) they claim it’s to smooth the returns hence over 10 years Prudential smoothed off 96% off my pension pot.

I have a number of Pru policies on my books and they are all beating your figure by some way. Most are around 5-7% p.a. I suspect your figures are not correct. Are you perhaps only looking at the annual bonus and not the final bonus? Pru, like most companies, uses the final bonus as the main thing with the annual bonus being very small.

The problem with just looking at 10 years ago is that you are including the recovery from the dot.com etc crash (which saw 43% wiped off equities) but not the drop itself. The final bonus you have accrued to date would be high if you invested a single premium around 10 years ago but if you invested say 11-14 years ago then it would be much lower.

Froggitt

Eric101 wrote: »

In the last 10 years Prudential claim to have made a 111.1% return on with profit investments. My Pension Pot has only increased by 9.8% in the last 10 years. would appreciate some help

Interesting timing.......today I received a statement of a pension I had from 2001 to 2003.....so similar timescales. It is invested in International Equity Growth, and UK Managed funds.....probably some default or restricted choice at the time.

It has increased in value from £13k to £31k over that time, which is about a 140% increase, which sounds quite good to me....9% annual growth......is it?

TheOilBaron

Ah well thats my letter through the door. £4K short on my £19.6K policy.
Good job I switched to capital n interest ages ago.
They have the cheek to even say they are one of the top providers and I am lucky cos there experts stopped a total collapse.

Froggitt

Mmmmmm. Lucky you have had circa 1% growth per annum for the past decade or so. Coco the Clown could have produced a better return than these experts.

spaceman62

I just spotted deep in a financial analysis that the SAIF(Scotish Amicable Insurance Fund) whilst closed will eventually transfer to the main Pru With profits fund. This will happen when the total fund value hits £1Bn +RPI since 1997 so currently that would be £1.56Bn. This means that any money left over from the transfer will be given to Pru policy holders. Current SAIF value is just less than £8Bn but many policies will pay out between now and 2018 so it will be in that kind of time frame. My policy is up in Jan 2014 but for those in later years I hope they give the money to you and not the Pru.

missingtowindward

Eric101 wrote: »

In the last 10 years Prudential claim to have made a 111.1% return on with profit investments. My Pension Pot has only increased by 9.8% in the last 10 years. would appreciate some help

Hi Eric101,

Your observation, as above, is very similar to one I made on a separate thread regarding Aviva's declared bonus additions to conventional WP endowment policies. Aviva have reported, over the last 10 years, approximately +56% growth in the WP fund and yet my policies with Aviva have only received 0.5%/year bonus additions for the last 10 years. And that bonus has only been paid based on any existing bonus. No bonus has been paid on the sum assured over the same period. My policy has achieved £20 growth a year for the last 10 years! And it's a £7000 SA life policy.

My post was given the same treatment by dunstonh as yours was:

'I have a number of Pru policies on my books and they are all beating your figure by some way. Most are around 5-7% p.a. I suspect your figures are not correct. Are you perhaps only looking at the annual bonus and not the final bonus? Pru, like most companies, uses the final bonus as the main thing with the annual bonus being very small.

The problem with just looking at 10 years ago is that you are including the recovery from the dot.com etc crash (which saw 43% wiped off equities) but not the drop itself. The final bonus you have accrued to date would be high if you invested a single premium around 10 years ago but if you invested say 11-14 years ago then it would be much lower'.

In my case the reference was to Aviva policies (rather than the Pru) and my observation was questioned in the same way. The implication is that these companies are holding on to all this collective growth with a view to distributing the profits via the final bonus when the policies mature. Guess what: which of the bonus payments carries the biggest caveat of all? Yes, you guessed it, the final bonus is not guaranteed and are subject to change at the companies discretion with no notice!

The policy now appears to be that the companies channel as little as possible into guaranteed areas of your policy and only pay up on the very last day, the final bonus, a sum that has no transparancy or prediction in advance.

It's wholely unacceptable, its a miss use of smoothing, its impossible to predict and impossible as a customer to plan for the future.

As customers we can only work out whats going on by reading the material the companies mail out and even now the figures sent to us, the customer, are ambiguous at best and mostly misleading.

This change to the management of WP funds is not down to the 'dot.com' bubble it represents a sea change in the way these companies do business. We now cannot track growth additions to our policies over the years. No, now you have to keep yours fingers crossed and hope that the day your policiy matures, after 25 years of investment, that the markets haven't taken a dive!

It's time for better reporting, clearer investment stratergies, accurate valuations of policies and to stop keeping policyholders in the dark.

thebullsback

any updates or thoughts on this subject ???

Froggitt

You would be wasting oxygen pursuing Pru on this.

thebullsback

do we all just take what we get off Pru and just leave it at that or is there any reason to expect more ????????????

dunstonh

thebullsback wrote: »

do we all just take what we get off Pru and just leave it at that or is there any reason to expect more ????????????

Absolutely no reason to expect more. Daily values are daily values. You get the maturity value on the day it matures. No more, no less.