Hi,
Last month I did some analysis of my various pension funds (I have four) and found that the prudential 'with profits' fund returned just
5.02% gross over the last 3 years. This is despite the prudential blurb saying that it has returned over 20% each year for the last 5 years. This makes it my worst perfroming pention, and in fact, is worse perfroming than sticking the x,000k of money in a high intrest savings account (way to go prudential).Has anybody else analysed their prudential pension and found similar results?
I complained to the prudential, and got a long letter back, with lots of information that I alredy know (how much I have paid in, when I increased payments etc), and then the letter got into the heart of the matter. I Quote....
"Before the 20% return can be passed to our policyholders through our bonus mechanism, we must make various allowances to ensure the long-term future of the fund. We must also build up our reserves used to reduce the impact on our policy holders of the volatile markets. This is known as 'smoothing' and limits the changes that can arise in the benifits payable in a particular year. This means that changes in claim values will not mirror changes in the underlying investment markets so that bonuses will not necessarily rise as markets start to recover"
All in all, they say that the product returns 20% growth but that they keep money back to take out the dips. So then why dont they just quote a real pension return of around 5%. Is this not missselling?
As I say, would be intrested to hear from anybody else witha Prudential with-profits fund, to see what their analysis of their pension reveils.