Pensions: Consolidating vs an Equitable Life situation?
Discussion
I have 3 pension pots, each quite large. One is a SIPP where I merged all my smaller old work pensions. All are DC pensions. Looking into consolidation before retirement.
I am concerned that if I consolidate these I am creating risk if something like the Equitable Life failure happens. I'm with Fidelity/Scottish Widows so big names, but big names have fallen in history. Apart from slightly more complicated draw down calculations does it really save me much consolidating to 1/2 providers now?
I am concerned that if I consolidate these I am creating risk if something like the Equitable Life failure happens. I'm with Fidelity/Scottish Widows so big names, but big names have fallen in history. Apart from slightly more complicated draw down calculations does it really save me much consolidating to 1/2 providers now?
targarama said:
I have 3 pension pots, each quite large. One is a SIPP where I merged all my smaller old work pensions. All are DC pensions. Looking into consolidation before retirement.
I am concerned that if I consolidate these I am creating risk if something like the Equitable Life failure happens. I'm with Fidelity/Scottish Widows so big names, but big names have fallen in history. Apart from slightly more complicated draw down calculations does it really save me much consolidating to 1/2 providers now?
My Dad was greatly affected by the EL fiasco but that was more than 25 years ago and significant regulatory reform has taken place since then so a repeat is unlikely although nothing is impossible.I am concerned that if I consolidate these I am creating risk if something like the Equitable Life failure happens. I'm with Fidelity/Scottish Widows so big names, but big names have fallen in history. Apart from slightly more complicated draw down calculations does it really save me much consolidating to 1/2 providers now?
However other than simpler admin ( perceived or otherwise ) in having all in one place do all 3 have similar results in terms of the pot growth and how do the charges of running each separately also compare ?
I moved 3 pensions ( 2 DC, 1 SIpp ) to Vanguard. I also moved 2 ISA and one GIA to Vanguad , so I am all in !
Reasons for everyone different but for me I didn't want to deal with different poeple now and definitely not later in ny doatage . for context , I am early retired but nothing in drawdowm . ( have a Db pension I will start later)
Sure Vanguard could go belly up. Unlikely, but not impossible . Chances are that if whatever happens causing that, its likely to be so bad the whole sector would be also shaken to its core .
Using 3 providers you are limiting risk if one goes under BUT you are maybe giving 3 chances for one go under than, if using one provider ?
Reasons for everyone different but for me I didn't want to deal with different poeple now and definitely not later in ny doatage . for context , I am early retired but nothing in drawdowm . ( have a Db pension I will start later)
Sure Vanguard could go belly up. Unlikely, but not impossible . Chances are that if whatever happens causing that, its likely to be so bad the whole sector would be also shaken to its core .
Using 3 providers you are limiting risk if one goes under BUT you are maybe giving 3 chances for one go under than, if using one provider ?
Vanguard is completely different to Equitable Life of course in terms of it is owned by its Investors not by shareholders per se and the funds are ringfenced.
EL went bust because of its " guaranteed returns " which meant in the long run it became a quasi ponzi scheme and many people lost all their savings as a result.
Iirc any government redress was relatively modest ( circa 30% ?)and that was only after years of arguments.
EL went bust because of its " guaranteed returns " which meant in the long run it became a quasi ponzi scheme and many people lost all their savings as a result.
Iirc any government redress was relatively modest ( circa 30% ?)and that was only after years of arguments.
alscar said:
Vanguard is completely different to Equitable Life of course in terms of it is owned by its Investors not by shareholders per se and the funds are ringfenced.
EL went bust because of its " guaranteed returns " which meant in the long run it became a quasi ponzi scheme and many people lost all their savings as a result.
Iirc any government redress was relatively modest ( circa 30% ?)and that was only after years of arguments.
Yes I recall the situation , a relative of mine was in EL tooEL went bust because of its " guaranteed returns " which meant in the long run it became a quasi ponzi scheme and many people lost all their savings as a result.
Iirc any government redress was relatively modest ( circa 30% ?)and that was only after years of arguments.
For record in this thread , I was not responding to you . I had left my respose sitting before coming back to computer and hitting submit
It was a particular type of Equitable Life product that failed, causing collapse of the business. So-called Guaranteed Annuities. What you are holding in your DC arrangement should be completely different from that sort of thing.
Whatever the name of the "platform" you use the actual investments should be separately secured in the hands of a custodian, although this is rarely visible to the retail investor on a day to day basis.
I don't use Vanguard and don't know how they operate. However, a quick google suggests that in the US they often act as their own custodian, holding investments separate from their own business in nominee accounts. In the UK it appears State Street acts as the primary custodian for Vanguard UK, holding both cash and shares for investors. Assets are held in a separate, third-party account under a Vanguard nominee name, ensuring separation from Vanguard s corporate assets, with oversight from the Financial Conduct Authority (FCA).
Whatever the name of the "platform" you use the actual investments should be separately secured in the hands of a custodian, although this is rarely visible to the retail investor on a day to day basis.
I don't use Vanguard and don't know how they operate. However, a quick google suggests that in the US they often act as their own custodian, holding investments separate from their own business in nominee accounts. In the UK it appears State Street acts as the primary custodian for Vanguard UK, holding both cash and shares for investors. Assets are held in a separate, third-party account under a Vanguard nominee name, ensuring separation from Vanguard s corporate assets, with oversight from the Financial Conduct Authority (FCA).
PM3 said:
alscar said:
Vanguard is completely different to Equitable Life of course in terms of it is owned by its Investors not by shareholders per se and the funds are ringfenced.
EL went bust because of its " guaranteed returns " which meant in the long run it became a quasi ponzi scheme and many people lost all their savings as a result.
Iirc any government redress was relatively modest ( circa 30% ?)and that was only after years of arguments.
Yes I recall the situation , a relative of mine was in EL tooEL went bust because of its " guaranteed returns " which meant in the long run it became a quasi ponzi scheme and many people lost all their savings as a result.
Iirc any government redress was relatively modest ( circa 30% ?)and that was only after years of arguments.
For record in this thread , I was not responding to you . I had left my respose sitting before coming back to computer and hitting submit
No I didn't think you were but just wanted to make the point that all " providers " aren't equal in comparison.targarama said:
I have 3 pension pots, each quite large. One is a SIPP where I merged all my smaller old work pensions. All are DC pensions. Looking into consolidation before retirement.
I am concerned that if I consolidate these I am creating risk if something like the Equitable Life failure happens. I'm with Fidelity/Scottish Widows so big names, but big names have fallen in history. Apart from slightly more complicated draw down calculations does it really save me much consolidating to 1/2 providers now?
This is something I am also concerned about, having come of financial age during the time of EL and Mirror Group under Captain Bob. I'm surprised the pensions industry haven't done more to allay these concerns tbh. I am concerned that if I consolidate these I am creating risk if something like the Equitable Life failure happens. I'm with Fidelity/Scottish Widows so big names, but big names have fallen in history. Apart from slightly more complicated draw down calculations does it really save me much consolidating to 1/2 providers now?
Collectingbrass said:
This is something I am also concerned about, having come of financial age during the time of EL and Mirror Group under Captain Bob. I'm surprised the pensions industry haven't done more to allay these concerns tbh.
I think post the Mirror group issue ( again different to EL and was pure theft by the Captain wasn't it (?) to shore up his other companies ) certain laws came into play including the Pension's Reform Act.Employees affected apparently recovered along with an additional HMG compensation scheme around an average of 50% of their Funds.
Doesn't BHS rather more recently though show that perhaps not all reform and regulatory changes have worked brilliantly ?!
alscar said:
Collectingbrass said:
This is something I am also concerned about, having come of financial age during the time of EL and Mirror Group under Captain Bob. I'm surprised the pensions industry haven't done more to allay these concerns tbh.
I think post the Mirror group issue ( again different to EL and was pure theft by the Captain wasn't it (?) to shore up his other companies ) certain laws came into play including the Pension's Reform Act.Employees affected apparently recovered along with an additional HMG compensation scheme around an average of 50% of their Funds.
Doesn't BHS rather more recently though show that perhaps not all reform and regulatory changes have worked brilliantly ?!
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