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Tuesday, 18 July 2017
Churning for Value?
July 16th was National Ice Cream day! Thanks to Michelle Cracknell from the Pensions Advisory Service for reminding me.
I have paraphrased her article here:
Apparently the difference between Gelato and Ice Cream is determined by 'churn'. American ice cream is whipped to create air, increasing the quantity by 25%. Cheap ice cream is whipped so hard that its volume can increase by 50% or even 90%. Whereas, Gelato goes for the slow churn making it very smooth but not increased in volume. This means that Gelato needs to be taken out of the freezer for at least 30 minutes before serving.
With the exit charges cap that was introduced in April, we have a situation where it could be better for some pension savers to 'churn' their old policy into a new style contract.
'Churning' by salesmen to 'earn' extra commission is frowned upon, but 'churning' to derive better value is to be welcomed of course.
Even if you do not need money from your pension pot now, it's worth checking with your provider on the amount of the exit charge plus also the ongoing charges on the contract in order to better understand if you are getting value for money.
It may be worth transferring to a new pension contract with lower charges and/or better investment options. This works if your exit charge has been reduced because of the 1% cap.
Read more about it here.
TPAS Link
It is like Gelato, the churn means that it tastes creamier than ice cream even though it uses more milk than cream, so it does not have nearly as much fat.
I have paraphrased her article here:
Apparently the difference between Gelato and Ice Cream is determined by 'churn'. American ice cream is whipped to create air, increasing the quantity by 25%. Cheap ice cream is whipped so hard that its volume can increase by 50% or even 90%. Whereas, Gelato goes for the slow churn making it very smooth but not increased in volume. This means that Gelato needs to be taken out of the freezer for at least 30 minutes before serving.
With the exit charges cap that was introduced in April, we have a situation where it could be better for some pension savers to 'churn' their old policy into a new style contract.
'Churning' by salesmen to 'earn' extra commission is frowned upon, but 'churning' to derive better value is to be welcomed of course.
Even if you do not need money from your pension pot now, it's worth checking with your provider on the amount of the exit charge plus also the ongoing charges on the contract in order to better understand if you are getting value for money.
It may be worth transferring to a new pension contract with lower charges and/or better investment options. This works if your exit charge has been reduced because of the 1% cap.
Read more about it here.
TPAS Link
It is like Gelato, the churn means that it tastes creamier than ice cream even though it uses more milk than cream, so it does not have nearly as much fat.
Sunday, 16 April 2017
Pensions Manager re-launches business site!
Click here to visit INTEGRITY PENSIONS
Here you can view my affordable business services to employers and trustee boards. I also help explain personal finance, pensions and investments to individuals and occasionally represent them in complaints to financial services companies and even the relevant Ombudsman.
_________________________________________________________________________
I am currently assisting WS Atkins - a former FTSE250 (now acquired by SNC Lavalin) leading civil engineering, design and project manager specialist, but am always interested in keeping in touch with anyone that might need short, medium or longer term assistance at some point in the future.
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