Protected Rights Investment Account - options ?

rail.link

My wife has a Protected Rights Investment Account with Norwich Union.

I'm unfamiliar with this matter and would appreciate some advice.

Does this arise from cntracting out of the Second State pension ?

Are the contributions coming from her NI deductions ?

What are her options ?

dunstonh

Does this arise from cntracting out of the Second State pension ?

yes

Are the contributions coming from her NI deductions ?

yes

What are her options ?

in respect of.....?

rail.link

Hi dunstonh,

Thanks for taking the trouble to answer my queries.

What are her options in respect of accessing the money ?

Also, 2 values are given - account value and transfer value; could she transfer this to a SIPP ? Would the contributions then continue into the SIPP ?

dunstonh

could she transfer this to a SIPP ?

No. Protected rights are not allowed in SIPPs at this time.

Personal pensions and fund supermarket pensions can (the latter is run like a SIPP for funds, like HL's Sipp but is an insured contract so can take protected rights).

What are her options in respect of accessing the money ?

You say access but then say later about contributions continuing. What is it that she wants to do with the pension in particular?

rail.link

She would like the pension to continue, ideally in a SIPP, but that's out of the question, I gather.

How much and when could she access the money, assuming the pension continued in it's present form ?

dunstonh

She would like the pension to continue, ideally in a SIPP, but that's out of the question, I gather.

SIPPs are overated. They are the current fashion mainly due to media coverage, much of which is paid for or sponsored by SIPP providers. They certainly have some advantages, especially when it comes to direct investment but with over 90% since April 2006 going into investment funds it is clear that they are not being used in the way they were intended.

For example, if she was going to use investment funds then stakeholder and personal pensions would be cheaper (when purchased via the same distribution channels, i.e. both on advice or both on execution only). NU's current version personal pension for example is good quality and recently they added a load of funds and have been doing so increasingly over the last 12-18 months.

Fashions go out of fashion. Previous media fashions were endowments and tech stocks (The consumers association used to promote endowments as well but you wouldnt believe it from their current stance). The Mail or Telegraph did a SIPPs guide earlier in the year (or late last year) and it was promoting them as low cost pensions which is complete rubbish (in the context that they were using funds and not direct investment).

How much and when could she access the money, assuming the pension continued in it's present form ?

Age 55 (50 until 2010) is when benefits can be commenced. That doesnt change whether its a stakeholder, personal pension, fund supermarket pension (hybrid/deferred SIPP as these are sometimes called) or full SIPP.

rail.link

Thanks for clarifying, dunstonh.

Your answers have been a great help; much appreciated.

EdInvestor

From October, SIPPs should be able to accept PR money, so best to check back then.

averageguy11

''sipps are overrated'' ..Erm cough cough..lol..thank gdness we hav Ed to balance up the negativity :0

dunstonh

averageguy11 wrote: »

''sipps are overrated'' ..Erm cough cough..lol..thank gdness we hav Ed to balance up the negativity :0

I'm not negative of the product but I am negative towards the over selling and over buying of SIPPs on the basis of misconceptions. The product is great if its what you need. However, too many are going into poorly invested SIPPs when stakeholder and personal pensions would be better and cheaper.

I am not a lone voice on this. Others have made similar comments in the media and even the FSA have voiced concerns on the over use of SIPPs.

averageguy11

Perhaps its the way u tell thm