Confused

Ray_Dickens

Duruing the past eight years since getting divorced I have been slowly getting myself debt free following what I had to pay in order to get the "clean break", along the way I made quite a few sacrifices and paying into my personal pension plan was one of them. I now have a decent company pension but they will not let me transfer what is left from my original pension across into it.
The last statement shows that it has lost over £500 in the last year and as all my contributions are going into the company scheme I cannot afford to pay into my original one. What can I do, do I have to just sit and watch it shrink to nothing, it's not worth a lot now anyway, less than £5k, is there something possitive I can do with it?

dunstonh

The last statement shows that it has lost over £500 in the last year and as all my contributions are going into the company scheme I cannot afford to pay into my original one. What can I do, do I have to just sit and watch it shrink to nothing, it's not worth a lot now anyway, less than £5k, is there something possitive I can do with it?

What makes you think it will shrink to nothing?

It dropped because late 2007/early 2008 was a bad year for investments. Not because of charges or similar. If you look at the previous years you will see it went up very quickly. You have to average out investment returns as some years will be good, some will do nothing and some will go down. You dont look at one year in isolation as that will never give you the true picture.

nrsql

And what makes you think it would be the best place to contribute.

It's a human trait that we are more concerned about losses than gains and it colours a lot of investment decisions. If that fund is going to shrink to nothing (which I doubt) then it's probably not a good place to contribute unless there is some threshhold that would make a difference.
Would be better to put your money in a cash ISA which at least will grow.

Ray_Dickens

What is concerning me is that as I'm not contributing to it at all the admin charges will completely wipe it out....that's why I want to know if there is any way of getting it out to invest somewhere safer without such ridiculously high management charges. I see your point that last year was a bad year for investing but I'd rather have what little is left working for me than just fading away.

nrsql

Have you tried writing to them to ask if it's possible to transfer out and what the charges would be?

Alternatively you could try calling another company to ask what they think the possibilities might be - or contact an IFA and see how much info you could get from a free discussion - would probably be easier to let the IFA handle anything you do with it anyway.

EdInvestor

What is the money invested in (funds), what other choices are there, and what are the charges?

Need all that info before judging if it's worth keeping or not.

dunstonh

What is concerning me is that as I'm not contributing to it at all the admin charges will completely wipe it out

Obviously it depends on the contract but most contracts have an annual management charge. That makes it virtually impossible to see it shrink due to charges as the amc is percentage (typically 1-1.5% p.a. of the fund value). If the investments returns are negative that year the fund value drops and the annual managment charge will be lower.

A very small minority of legacy pensions may run with a policy fee that is high enough to erode the value but the majority wont. Only a proper review will tell you.

I want to know if there is any way of getting it out to invest somewhere safer without such ridiculously high management charges.

What are the charges? They could be non-existent for all you know. You are making the assumption that the fund value has dropped due to charges. Most likely it has dropped due to investment returns.

I see your point that last year was a bad year for investing but I'd rather have what little is left working for me than just fading away.

What about the 5 years before that where the value would have gone up a lot (nearly doubled if you were fully invested in the stockmarket). You have to average the good and bad. You cannot keep getting good years. Yes it would be great but that isnt how it works.