Personal Finance: The personal touch

Four experts try to show why they could be so good for you

PERSONAL PENSIONS may look the same, but they can vary widely in terms of contractual flexibility, charges and fund choice. We asked four advisers to suggest a plan appropriate to a particular set of circumstances. Not surprisingly, each has made a very different recommendation in each case.

Personal pension for a man or woman aged 50 or over.

Christine Ross, partner at nationwide independent financial advisers Willis National

IT IS never too late to make pension provision, and we are seeing a growing demand from people in the over-50 age group. Those taking a personal pension for the first time have often been members of an employer's pension scheme but have taken early retirement in their early fifties.

Remember, even if you are already receiving a pension income, you can still make additional contributions to a personal pension if you have other employed or self-employed earnings.

For this group I would suggest a "cautious" choice of fund. A good "with- profits" fund might be my recommendation. These smooth out some of the ups and downs of conventional equity investment.

Two of the best providers of this type of fund are Standard Life and Scottish Widows.

A single woman, aged 25-30, who might decide to break her career to have children at a later stage.

Fiona Price, managing director at Fiona Price & Partners, in London

I WOULD look at a personal pension from Royal & Sun Alliance. These have simple, competitive charging structures, so that you stop and start premiums at any time without penalty. This is important if you plan to take a career break.

Also, Royal is financially very strong, so I would expect the company to be around when you reach retirement age. It has a good fund management team, and performance has been excellent.

If I had to choose just one of its funds, it would be the Pension Managed fund. It has a great track record and suits the average investor. But take independent financial advice.

A plan for an ethically minded investor

Richard Hunter, independent financial adviser at Holden Meehan, a London IFA firm

MORE AND more of us are making that vital connection between saving for the future and making sure there is one. Socially responsible pension plans are a means of doing this.

Over the last three years we have seen the ethical investment sector coming of age. Fund providers have shown that they can provide good returns for investors, and in some cases these have clearly done better than non- ethical alternatives.

Choosing to save this way allows us to become individually involved in encouraging employers to empower their staff, use the environment intelligently, and conserve resources.

One plan that stands out is that from Friends Provident, who manage the Stewardship Fund. This is the largest and longest established of the mainstream "ethical" funds.

Tracker funds and lifestyle pensions for the savers in their 30s and 40s

Tony Wood, marketing director at Virgin Direct

THE PROBLEM with traditional personal pensions is that they encourage a "one size fits all" mentality. Most savers are channelled into a managed- equity or with-profits fund. These can mean too little risk in the early years but too much risk later on when security becomes a priority.

I work for Virgin Direct partly because I believe in the quality of its pension product. It is a "lifestyle pension".

Lifestyle pensions also allow greater flexibility to stop, start, increase and decrease payments without penalty. Choosing a UK FTSE All Share "tracker" fund will reduce costs, spread risk, and show better growth than about 90 per cent of actively-managed funds.

Interviews By

Iain Morse

Willis National: 0800 0966 51 692 1700; Virgin Direct: 0345 900900

pounds 1,000 invested single premium, bid to bid, over 2 and five years to end last month

B/O Annual man 2 year 5 year

spread charge value value

Virgin n/a% 0.7/1% pounds 1,385 pounds 2,045

Royal & 5% 0.5% pounds 1,355 pounds 1,788

Sun Alliance

Friends 4.99% 0.7% pounds 1163 pounds 1,684

Provident

Stewardship

Standard 5% 0.625% pounds 1,021 pounds 1,464

Life

Scottish 5% 0.875% pounds 1,112 pounds 1,528

Widows

Allocation rates may vary, all premiums single