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Thread: With profits royal London personal pension plan

  1. #1

    With profits royal London personal pension plan

    I have a small pension which on last years statement gives a transfer value of just over 19,000 and the notational value is about 12,000 . Im considering making contributions again, im allowed 240 per month having finished work with an extra 60 tax relief. The transfer value includes a possible final bonus which isn't guaranteed whereas the notational value is guaranteed. So, does this mean that the final bonus on last years transfer value was c. 7,000 and how likely would it be that I would have received it all, half of it or nothing, leaving me with just the notational value? It sounds great that I could potentially have my fund grow for the next 5 years if I restart contributions 'plus' 720 tax relief from the govt. each year. But if at the end of it all I don't receive a final bonus it wouldn't be worth the hassle.

  2. #2
    'Fraid I can't comment on your specific pension. I found it worth paying into a pension and getting tax relief but I set up my own SIPP (self invest personal pension) and picked my own funds - however you might find that doesn't work for you as the fees for a SIPP may be too high to make it worthwhile. I have 2x SIPPs that each charge < 200 pa.

  3. #3
    Firstly, it makes sense to make contributions each year if you can, since even with the basic contribution of 2880 the government tops this up with a "free" 720.

    As regards the final bonus, this should be specified on your statements. If you're unclear, I'd suggest that you contact Royal London about it. I would assume that the 7000 bonus is due to the underlying value of the With Profits fund, suggesting that it currently has a healthy surplus. Going forward, this surplus may increase or decrease, so wouldn't be guaranteed.

    You could lock in what looks to be a healthy bonus by transferring your pension now, or keep it and take the risk that it may decrease in future. Alternatively, could you switch to a different Royal London fund?

    Ensure that you don't lose any guarantees by transferring out.

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