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    • shilts
    • By shilts 9th Feb 18, 7:29 PM
    • 55Posts
    • 2Thanks
    shilts
    Phoenix pension MVR
    • #1
    • 9th Feb 18, 7:29 PM
    Phoenix pension MVR 9th Feb 18 at 7:29 PM
    I wish to transfer out of my Phoenix with profits pension . My financial advisor has just informed me that in the last week or so Phoenix have started to apply a market value reduction which amounts to about a 4.8% reduction in the value . My advisor had all of the information regarding my pension from Phoenix and this has just come to light . Iím told that very few companies ever apply this reduction and he advises me to sit tight for the time being to see if this changes and he will keep checking . What is the likelihood of this changing as I wish to change providers as soon as possible to a better performing one ? In addition to this I wanted to put additional funds into my pension each month and I am now unsure what to do and not sure I want to add more money into my Phoenix pension . Thanks for any help .
Page 1
    • dunstonh
    • By dunstonh 9th Feb 18, 9:26 PM
    • 92,634 Posts
    • 59,945 Thanks
    dunstonh
    • #2
    • 9th Feb 18, 9:26 PM
    • #2
    • 9th Feb 18, 9:26 PM
    I!!!8217;m told that very few companies ever apply this reduction and he advises me to sit tight for the time being to see if this changes and he will keep checking
    Is he a new adviser? Or is he an FA rather than an IFA? (tied agents often dont see the world outside their own bubble). Activation of MVRs has been commonplace since the early 2000s. You typically see them activated after downturns.

    In addition to this I wanted to put additional funds into my pension each month and I am now unsure what to do
    That should be unaffected by this.

    nd he advises me to sit tight for the time being to see if this changes and he will keep checking .

    So, they are applying an MVR of 4.8% after around an 8-10% drop. Are you going to wait for it to go back up 10% so you can get your 4.8%?
    not sure I want to add more money into my Phoenix pension
    But you said you were opening an alternative. So, why not use that?
    Last edited by dunstonh; 10-02-2018 at 5:02 PM. Reason: formatting box wrong
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • shilts
    • By shilts 10th Feb 18, 2:46 PM
    • 55 Posts
    • 2 Thanks
    shilts
    • #3
    • 10th Feb 18, 2:46 PM
    • #3
    • 10th Feb 18, 2:46 PM
    Thanks for the reply .

    He is a new IFA and said that a MVR had been activated on my pension in the last week or so but also said that this may change and that he would regularly check .

    My intention was to switch the Phoenix pension to an alternative through my IFA then add additional monthly contributions . The problem I have is that without switching the Phoenix I cannot open the alternative as there would not be sufficient funds just from my monthly contributions to cover the IFAís yearly charges as they require a minimum fee per year
    (hope that makes sense) . The situation with Phoenix and the MVR is going to be monitored in the hope that the activation may be lifted and then I can complete the switch . I want to make additional contributions as soon as possible but am not sure if adding them to my Phoenix plan is the right thing to do if the MVR stays in place .

    I donít know whether I should take the advice and hold fire for the moment to see if the situation changes then make the switch (not sure how likely this is).

    Hold fire on the switch but pay the additional contributions into my Phoenix in the mean time and hopefully switch if and when the MVR is lifted .

    Or , bite the bullet and accept the MVR which would then make the switch a little less attractive.

    Sorry for running on as I have tried as best I can to explain my dilemma. I guess the key is :- how likely is it that the situation will change and Phoenix will stop applying a MVR and when .

    Thanks for your help .
    • dunstonh
    • By dunstonh 10th Feb 18, 5:05 PM
    • 92,634 Posts
    • 59,945 Thanks
    dunstonh
    • #4
    • 10th Feb 18, 5:05 PM
    • #4
    • 10th Feb 18, 5:05 PM
    The problem is that there is a 4.8% loss if you move now. That follows around a 10% drop. So, for that 4.8% to go away, the markets need to recover that 10% drop.

    Or you move it now, take the 4.8% loss and if it goes up the 10% then you get the full benefit. You are not going to lose the money. If the new plan is better than the old, the new one should do better in the growth period. If it's not better than you shouldn't be transferring it.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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