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Closed Insurance Companies

Ten years ago there were over 100 companies able to sell you a personal pension. Each of the banks had their own insurance company such as Lloyds Life, Barclays Life, Nat West Life etc; Friendly Societies and Unit Trust Groups all had pension contracts and there were far more insurance companies than there are now.

We believe that in ten years time instead of over one hundred pension providers the market place will feature just five competitive players.

Some companies have or will be bought out by larger competitors but a lot of them are simply restricting access to new business. They will continue to manage the monies and take premiums from existing clients but will refrain from adding new clients to their books, eventually leading to the demise of the business. Current examples include Scottish Mutual, Abbey Life, NPI and other household names.

There is clear evidence to suggest that the long term fund performance of closed companies under-performs the average. This is not totally surprising, firstly because it is difficult for that company to retain top fund management talent and, secondly, as more people are drawing benefits than making contributions so the fund manager has to hold more money as cash and fixed interest investments which, over the longer term, under-perform equities.

At the same time, closed companies have no need to compete on charges with their more viable competitors.

There are currently about 124 companies closed to new business managing investments worth £139 billion.

If you are unknowingly contributing to or have monies with any of these closed companies the long term financial consequences could be severe. In our experience there has never been a more compelling argument to have your existing pension benefits thoroughly reviewed and tested against the charging structure and long term performance of modern contracts.

We are happy to undertake this review for you for FREE so what do you have to lose? Simply contact Wendy Tipler on 0845 872 2099 or email watipler@primeaccountants.co.uk

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