Is your pension in a With-Profits Fund?

With Profits funds have come under scrutiny in recent years after a lack of transparency caused confusion and concern and many funds showed low or zero returns.

We first saw the emergence of with-profits funds back in the 1980’s, attractively advertised as a profitable long term investment option for the future.

During the market crash during 2000 – 2003, there were massive losses within the funds, bonuses were cut and providers pulled out. This has since seen a decline in payouts, which looks only to decrease in the future. Gaining information on exactly where the money is invested and charges which are being applied has been reported as very unclear for clients.

with profits fund - sorting out your pension

Phoenix Group is a consolidation company which took over a large number of the closed with-profits funds.  Most of these funds have been reported as paying out very low or no bonuses at all, many having not had a bonus in over a decade. Whilst this news does suggest investors transfer their money out of the with-profits funds there are some which hold valuable guarantees and therefore it may be worth staying put – this is where it’s crucial to review the exact type of product you have.

Another aspect you may need to look at is the penalties you could be faced with for withdrawing from with-profits funds. These are also known as a market value reduction (MVR).  There are opportunities in some cases whereby you can withdraw from the funds without incurring a penalty.



Whether you have a with profits fund and are unhappy with its performance, or you are looking to invest in one, you need to now explore all of your future options in order to ensure your money is going to give you a healthy return when you most need it.

With just one area of investments detailed above the question has to be; do you really know if your money is working for you? The fund options available to you should enable you to feel confident that you have made the best decision and will be retiring with a healthy sum.

Please contact us for a review.

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