Pension Lapsed With No Value ?

[Iggle Piggle]

Can anyone say whether a pension plan can lapse with no value ? How is this possible? The plan in question has had about £20 paid in a month for a little over 20 years, this in my book is about £5000. Monthly payments were stopped due to financial problems about two years ago. Surely a pension plan doesn't cost £2500 a year to keep open?

[douglas9401]

The simple answer, Iggle Piggle, is that pension companies are the scum of the earth, secon only to insurance companies with governments coming a close third.
They will all steal your money when they can.

[SirOracle]

Iggle Piggle
Where are you getting your information from. ?

From what you say it is extremely unlikely. Is this a personal pension or an occupational one. ?

[fiction-factory]

Maybe they are the scum of the earth and trying to steal your money....
Or maybe there has been a misunderstanding.
What sort of plan was it? Who has said it's worth nothing? Maybe they mean you can't just get your cash back yet (assuming you are under 55)
For a pension plan for just £20 a month I doubt the pension you would have received at retirement would have been much anyway- maybe £10 a month

[johnny37]

You need to contact your provider to find out why. It is unlikely the plan is now zero, tho financial service providers seem to think more of profits than providing a service. It may have been marked as dormant but that will not stop the system piling on more hefty charges.

[ToraToraTora]

I used to do programming for pensions ….
2 things (talking generally about pensions, I do not know the precise figures here)
1) £20 per month for 20 years is £4800, now you'd hope that would grow but for the first 18 months to 2 years the money would be going almost entirely in commission. during that time the company charges will have caused your fund to go negative(depending on the plan they may waive charges during this period). After the commission is paid your fund will start to claw back the negative amount and hopefully start to grow but remember there will be annual management charges probably deducted monthly so the full £20 is not going into the plan.
2) After you stop paying monthly the charges are taken by selling units to cover the charge, Units can fall. If the unit prices fall at the time the annual charge is incurred then more units need to be sold to cover the charges for larger funds this is swings and roundabouts but for low amounts like this it really is in the lap of fate as to the effect of this and as to what the balance can end up at. Ask for a full statement of the full history of the plan and you will see where it all went.

[fiction-factory]

Yss, the same applied to life assurance contracts. These are long term contracts and not designed for peopel to pull out before the end. However I am pretty sure we have not got the full story here or there is a misunderstanding.
I agree that you need to get details in writing from the provider.
Are you under 55, igglepiggle?

[Iggle Piggle]

Thanks Tora, I have done exactly that. I have requested a full balance sheet and breakdown of where the money has gone.
I think the best bet is for me to set up a standing order to a savings account and trust myself not to touch it. Far better than any pension plan !

[Old_Geezer]

If you can get to it and are relying on will power not to touch it when in need of cash, that's not really making provision for your pension. Sooner or later you will need money and not be able to justify leaving that pot alone. You need to tie it up so you can't get to it until it is to provide for your living costs. Defined benefit pensions were fit for purpose. Defined contribution is a gamble with your future, especially when they allow you to draw down. If you are financially astute enough to control your own portfolio you may be able to put something together though.

[ToraToraTora]

for £20 don't bother with a pension, pointless

[fiction-factory]

Are you under 55 or 55 and over , iggle piggle. The answer to that may give the answer to your query.
Whilst I agree that £20 a month is not worthwhile for a pension, at least you get tax relief so it only costs you £16 in effect. A pension can be wrothwhile but to get something appoaching a reasonable amount to live off in retirement you need to be paying in more like £200 a month minimum for a considerable period.

[Iggle Piggle]

Strange, when I requested a breakdown of where the money had gone and suggested I could request this under the Data Protection Act if they refused, they have 'found' my money.
I wonder how many times these companies get away with this?
All I need to know now is who to transfer my money to who is honest and reliable. I think I'll be in for a fruitless search. :-(