1. Home
  2. UK Finance Discussions
  3. Standard Life - possible windfalls scenarios

Standard Life - possible windfalls scenarios

Firstly, to those who find the subject tacky or offensive; sorry. I find nothing tacky or offensive about a possible extra grand or so in my pocket.

I realise this is all speculation and any answers are guesses, but I'd like your opinions, please.

In 2000, SL stated there would be no windfall benefits to any With Profits holder of less than 3 years.

My missus and I both took out SL stakeholder pensions in August 2001. There is no possibility of a demutualisation before Aug 2004. But will the 3 year rule apply to actual demutualisation, or to announcement of such ?

When is a WP plan not a WP plan ? - Maybe when inside a stakeholder pension. I spoke with SL and they stated that WP fund holders in stakeholder pensions MAY NOT be eligible for windfalls for the reason that there is NO terminal bonus to WP fund holders in stakeholder pensions. Smells fishy to me. They never told me that when I opened the plan!

If SL really want to demutualise, they have to make it attractive to WP holders to vote for it.

I need to invest 3K in a personal pension inside the next couple of months (for FY2003/4). Am I likely to benefit from an enhanced windfall if I buy more WP units at SL, or would you go elsewhere?

What are your best guesses on the SL situation generally, and on my particular situation.

Thanks in advance.

Steve

Reply to
Steve
Loading thread data ...

I think Standard Life need the money from demutualisation to remain solvent, so I don't think policy holders are going to get much.

Reply to
Jonathan Bryce

I too did wonder if this was a means of getting a cash injection.

Reply to
Steve

They need to raise more money to support the w/p fund. I suspect the most useful scenario would be to sell the shares (which are in effect owned by the fund) for cash in the market, and put that cash into the fund. The end result would be that investors would not get any immediate windfall, but that the future bonus expectations would be higher - assuming of course that the extra cash is used to good effect (compare with what happened to the TSB, which went on a spending spree and wasted most of it). OTOH it may be that they will feel they need to give some immediate bonus to persuade members to vote for it.

Personally I would not want to put money into with-profits at all, I felt that way even when things were apparently going well and I don't see much reason to change my view. They have high charges, no transparency and there are plenty of other products which provide better deals. Given the long-term nature of the commitment I don't think the prospect of demutualisation windfalls provides much compensation for the intrinsic disadvantages.

Reply to
Stephen Burke

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.