Research from a leading online investment supermarket, Fidelity FundsNetwork, suggest that poorly performing protected rights pots could result in one-third of pension savers moving their assets to the self-invested personal pension (sipp) market.
Their research has revealed that 38 % of these investors intend to either move their protected rights monies into a Sipp or open a new one in order to do so. Less than 8 % of respondents were happy to leave their protected rights money untouched.
Protected rights presents a big opportunity for advisers. The research showing that a lot of protected rights holders are just fed up with the poor returns they are witnessing from insurance company funds and, despite the burden of exit charges of up to 25 % (a rather high exit charge!), want to switch the money into a Sipp.
To counter this a financial adviser said that the recent interest in Sipps has been largely media driven for protected rights but it is certainly something to be looked at for clients who have got substantial other funds.
One thing is certain, if a greater fund performance can be found for these protected rights monies then that will lead to a greater overall pension fund for a retiree, leading to the prospect of a bigger pension annuity income.