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What Should I Do About My Personal Pensions ?


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#1 Isakndar

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Posted 14 January 2012 - 06:38 PM

I was forced to review the status of my current pension schemes I had aquired over the years through changing jobs today when I found my stakeholder personal pension statement hidden on my desk. All of my pension plans are personal or money purchase schemes as I have mostly worked in the private secton for over 20 years. This is something I detest doing because it usually makes me feel nauseous at the thought of the rip offs I have suffered from the very beginning when I took out my first personal pension, which what turned out to be a very dodgy company.

I currently have an occpational money purchase scheme with my present company.
A large Stakeholder PP scheme which had been moved to L&G 3 years ago.
A contracted out scheme also with L&Gwhich is no longer contributed to.
A PP scheme from my last company with Aegon.

There were others but they have been collapsed into the above 4 schemes, including a sum gained from the mis selling scandal of the 1990s

They are all being devoured by high charges - except the present company scheme.

The stakeholder scheme takes 20% of my monthly contributions and the others are declining by 5% per annum. 20 years of charges have almost removed any real gains made - the schemes seem nothing more than method for extracting the tax rebates into the hands of the financial industry.

There must be a fair few HPCers who are or have been in the postion - what have you done to move away from this situation and what advice would you give?

#2 Voice of Reason

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Posted 14 January 2012 - 07:07 PM

Can you combine them into your present company scheme? It's often possible, and you say it is better charged so may be advantageous.

If not, consider combining them into one better charged new contract. Charges are more competitive today than they were some years ago and some providers offer discount for larger fund sizes which strengthens the argument for bringing them together.
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#3 TheBlueCat

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Posted 14 January 2012 - 07:38 PM

I was forced to review the status of my current pension schemes I had aquired over the years through changing jobs today when I found my stakeholder personal pension statement hidden on my desk. All of my pension plans are personal or money purchase schemes as I have mostly worked in the private secton for over 20 years. This is something I detest doing because it usually makes me feel nauseous at the thought of the rip offs I have suffered from the very beginning when I took out my first personal pension, which what turned out to be a very dodgy company.

I currently have an occpational money purchase scheme with my present company.
A large Stakeholder PP scheme which had been moved to L&G 3 years ago.
A contracted out scheme also with L&Gwhich is no longer contributed to.
A PP scheme from my last company with Aegon.

There were others but they have been collapsed into the above 4 schemes, including a sum gained from the mis selling scandal of the 1990s

They are all being devoured by high charges - except the present company scheme.

The stakeholder scheme takes 20% of my monthly contributions and the others are declining by 5% per annum. 20 years of charges have almost removed any real gains made - the schemes seem nothing more than method for extracting the tax rebates into the hands of the financial industry.

There must be a fair few HPCers who are or have been in the postion - what have you done to move away from this situation and what advice would you give?

Transfer them all to the lowest cost SIPP you can find and distribute the investments around the lowest cost trackers available within that SIPP. Hargreaves Lansdown are good but there's plenty of others too. This doesn't mean your investments will necessarily do any better but you'll be paying out the minimum possible in charges at least.

#4 TheBlueCat

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Posted 14 January 2012 - 07:39 PM

Can you combine them into your present company scheme? It's often possible, and you say it is better charged so may be advantageous.

Good advice, but again check the charges carefully of course.

#5 doahh

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Posted 14 January 2012 - 07:56 PM

I had a chat with a friend last night and he told me about a family member. He had several well funded pensions and so decided to merge the all into one. The company that he choose to manage his pension went bust, and the story is that he has lost everythinng. Apparently he is not covered by any guarentees at all. So you may want to be careful before merging them all together, make sure you choose a well funded company to go with,

Can anyone confirm that pensions are not covered by government guarentees? I was amazed by my friends story. It sounds like the pension industry is no better than share brokers such as MF Global.

#6 shindigger

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Posted 14 January 2012 - 08:08 PM

However you decide to proceed,
DONT
GIVE
THEM
ANY
MORE
OF
YOUR
MONEY.
If you want a cheaper house, vote Labour in 2015.

#7 riverside

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Posted 14 January 2012 - 08:28 PM

What is the % contribution by your current employer to the money purchase scheme you will lose this if you stop contributing to the company scheme

What are your current earnings taxed at the benefits of SIPP are 25% and 40% so obviously its a better bet if you are a higher rate tax payer


SIPPS are the way to go imho mostly because of the tax break and the autonomy but the government has already had a nibble at them with regard to the rate at which you can empty your pension pot so nothing is guaranteed in the long term



Alternatives to Hargreaves Lansdown to consider
Sippdeal (AJ Bell)
Jame Hay (part of santander)
Killick
Fidelity

Also you could read up on the forums for pensions and savings on moneysavingsexpert and motley fool they are pretty informative


For investments investment trust etfs and the newer american low cost provider Vanguard products are worth looking at

#8 rit

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Posted 14 January 2012 - 08:41 PM

What is the % contribution by your current employer to the money purchase scheme you will lose this if you stop contributing to the company scheme

What are your current earnings taxed at the benefits of SIPP are 25% and 40% so obviously its a better bet if you are a higher rate tax payer


SIPPS are the way to go imho mostly because of the tax break and the autonomy but the government has already had a nibble at them with regard to the rate at which you can empty your pension pot so nothing is guaranteed in the long term



Alternatives to Hargreaves Lansdown to consider
Sippdeal (AJ Bell)
Jame Hay (part of santander)
Killick
Fidelity

Also you could read up on the forums for pensions and savings on moneysavingsexpert and motley fool they are pretty informative


For investments investment trust etfs and the newer american low cost provider Vanguard products are worth looking at


It's also worth looking at http://www.cavendishonline.co.uk/ if you go for a general unit trust based SIPP. Your funds can be invested into the Fidelity based service, but just about all the yearly unit trust backhanders that all of the above companies will hold on to will be refunded. Most unit trusts pay out .35%pa to the service provider and around .5%pa to the IFA. So with Cavendish they refund the .5% and Fidelity retains the .35%.

I've been using them for my ISAs and pension for a number of years and while they can only offer a limited service they seem able to do what they claim on their web site. It's also rather nice to have my pension paying me each year before I can even take it :)

One thing to be very careful about is none of the above offer good solutions if you wish to hold your SIPP in cash. To do this you have to go for a more costly solution that allows you to invest in a range of term deposit accounts - as such it's only worth doing if you are sure you can get a return that pays the yearly fees charged.

Roger

#9 porca misèria

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Posted 15 January 2012 - 12:24 PM

I had a chat with a friend last night and he told me about a family member. He had several well funded pensions and so decided to merge the all into one. The company that he choose to manage his pension went bust, and the story is that he has lost everythinng. Apparently he is not covered by any guarentees at all. So you may want to be careful before merging them all together, make sure you choose a well funded company to go with,

Can anyone confirm that pensions are not covered by government guarentees? I was amazed by my friends story. It sounds like the pension industry is no better than share brokers such as MF Global.

Erm, sounds like a possibly-muddled account (chinese whispers?) What company was that that went bust? Surely the failure to separate clients money from its own assets (thus putting clients at risk of wipeout through going bust) would've made a Maxwell-sized scandal we'd all have heard of?

#10 doahh

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Posted 15 January 2012 - 08:19 PM

Erm, sounds like a possibly-muddled account (chinese whispers?) What company was that that went bust? Surely the failure to separate clients money from its own assets (thus putting clients at risk of wipeout through going bust) would've made a Maxwell-sized scandal we'd all have heard of?


It sounded odd to me as well, but that was the story. I would have assumed that there would have been some sort of government cover as a last resort as well. I don't have any more details unfortunatly, I will try to remember to ask him next time I meet and repost back.

#11 Isakndar

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Posted 17 January 2012 - 09:45 PM

Sorry not to have engaged any of your replies to date though they are much appreciated - busy weekend and a trip to Milan ( not much fun when you have to be up and on site a 3 am) got in the way. I will take your replies in turn. thanks

#12 Isakndar

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Posted 17 January 2012 - 09:48 PM

Can you combine them into your present company scheme? It's often possible, and you say it is better charged so may be advantageous.

If not, consider combining them into one better charged new contract. Charges are more competitive today than they were some years ago and some providers offer discount for larger fund sizes which strengthens the argument for bringing them together.



Thanks - I have tried to incorporate my unfunded Aegon scheme to my present Company scheme - but it seemed to run into gorund through lack of interest on part of the company Bluefin.
This is something I have noticed if pension schemes are not going to make any personal gains out of changes to pension schemes they are not motivated

#13 Isakndar

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Posted 17 January 2012 - 09:51 PM

Transfer them all to the lowest cost SIPP you can find and distribute the investments around the lowest cost trackers available within that SIPP. Hargreaves Lansdown are good but there's plenty of others too. This doesn't mean your investments will necessarily do any better but you'll be paying out the minimum possible in charges at least.


I am interested in SIPPS but know very litlle about them. One of my problems is that I an scared of making decisions about large sums of potential and real cash, I would want to know more from a disintersted party before I embark on such a change.

#14 Isakndar

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Posted 17 January 2012 - 09:54 PM

I had a chat with a friend last night and he told me about a family member. He had several well funded pensions and so decided to merge the all into one. The company that he choose to manage his pension went bust, and the story is that he has lost everythinng. Apparently he is not covered by any guarentees at all. So you may want to be careful before merging them all together, make sure you choose a well funded company to go with,

Can anyone confirm that pensions are not covered by government guarentees? I was amazed by my friends story. It sounds like the pension industry is no better than share brokers such as MF Global.



I think this is excellent advice - one of the reason I have not merged more of my pension schemes if for this reason - it is probably better to be diversified to an extent. but if I am to keep a level of diversity then they all need to be funded rather than stagnent and losing thought charges.

#15 Isakndar

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Posted 17 January 2012 - 09:58 PM

However you decide to proceed,
DONT
GIVE
THEM
ANY
MORE
OF
YOUR
MONEY.



If I was 29 I would agree with you knowing what I know now - but I have roughly £220K invested at current valuations ( soon to be £10 at 2015 prices), and the awful way the charging structure is implemented means you have to commit more as the valuation increases just to hold the line, Obviouslt this has nothing to do with admin effort.




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