I have a Scottish Life (Sovereign) Personal Pension which invests the capital in the Money Markets. I was informed that the best rates of interest could be achieved because the combined assets of all the policyholders are pooled. This rate would be better than I could achieve personaly.
Indeed for the first years (my plan started 1985) interest achieved was always greater than Base Rate. However in the past three years the interest has seriously under performed Base Rate :
Year ending March 2003 ..... 3% Year ending March 2004 ..... 1.87% Year Ending March 2005 ..... 2.75%
(All charges are on contributions paid NOT the capital account)
Why this sudden under performance?
De-Mutualisation = Creaming off interest rate? or Deliberate under performance to encourage holders of this plan to transfer out and lose benefit of Guaranteed Annuity Rate?
Has anyone else a policy with a different company that invests in the Money Markets? If so what has it achieved? Has anyone else a Sovereign Policy with Scottish Life?
What do I do? (HELP!)
Thanks ... Adrian