Best and Worst: Personal Pensions
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Your support makes all the difference.SOME of the companies that sold the largest number of personal pensions are at the bottom of the performance tables.
For instance NPI, which has a large slice of the market, said that other offices that had better performance were subsidising their bonuses and would not be able to maintain their bonus levels over the longer term.
David Dunn, head of product development, said: 'We pay out a huge amount in maturities. We are not in a position to try and manipulate returns.'
Scottish Mutual blames its poor performance on the charging structure of its pension contract.
Mark Colman, Scottish Mutual investment marketing manager, said: 'The product is very front-end loaded. All charges are loaded at the beginning of the contract.'
Mr Colman said: 'Towards the end of the contract we would hope to consolidate our position.'
Prudential, the UK's biggest pension provider, said that the figures shown in the survey were for the contract that it sells through independent financial advisers. This is designed to take a higher level of monthly premium. Most of the early year's contributions will be eaten up by commission. The Pru has sold about 20,000 personal pensions through this distribution channel.
Steve Bee, Prudential pensions manager, said that 890,000 of its personal pensions were sold by its direct salesforce. He said: 'The equivalent figure for this contract would be pounds 3,938.' This would make it 20th out of 26.
The contracts sold through its direct salesforce are designed to take a lower level of premium.
Mr Bee said: 'This contract is a long-term contract and is not designed for the short-term investors and low levels of premiums.'
Sun Life said that it was not manipulating its bonus rate to make its returns look better.
Ian Leech, business development manager, said: 'Our investment strategy has paid off - we have not manipulated our with-profits performance.'
Equitable Life puts its good performance down to the fact that it has some of the lowest expenses in the pensions market.
Nigel Webb, Equitable Life senior manager, said: 'We also have a very good investment performance.'
The survey shows that this life office has one of the lowest expense ratios.
----------------------------------------------------------------- PERSONAL PENSIONS ----------------------------------------------------------------- The best pounds 1 Royal London. . . . . . . . . . . . . . . . 4,715 2 Equitable Life. . . . . . . . . . . . . . . 4,424 3 Sun Life. . . . . . . . . . . . . . . . . . 4,327 4 Sun Alliance. . . . . . . . . . . . . . . . 4,298 5 Scottish Equitable. . . . . . . . . . . . . 4,275 The worst 22 Standard Life. . . . . . . . . . . . . . . 3,908 23 Prudential. . . . . . . . . . . . . . . . .3,899 24 NPI. . . . . . . . . . . . . . . . . . . . 3,846 25 Britannia Life. . . . . . . . . . . . . . .3,774 26 Scottish Mutual. . . . . . . . . . . . . . 3,754 The table shows the value on 1 April 1994 of a pounds 50-per-month with-profits plan commencing on 1 October 1988. ----------------------------------------------------------------- Source: Money Marketing with-profits survey -----------------------------------------------------------------
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