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Virgin Money Personal Pension

Pension (Stakeholder)
Published 28 January 2010
Helpful? 13
Open Quote Too simple for its own good. If you want a stakeholder pension then do yourself a favour and choose one with a wider fund choice.End Quote
Thumbs Up
  • Simple
  • Charges less than the maximum allowed
Thumbs Down
  • Only 2 funds
  • Impossible to get a sensible investment spread
  • Fixed interest fund performance unconvincing
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This is a very basic stakeholder pension with annual charges of 1% and a choice of two funds.

One of the funds tracks the FTSE All Share Index while the other invests in gilts and corporate bonds (i.e. fixed interest).

You could argue that the lack of fund choice is a good thing as it stops people getting confused and picking inappropriate high risk funds, but personally I'd feel very uncomfortable if my retirement prospects hinged on the performance of just two very narrow funds. 

The tracker fund does what it says on the tin and in fairness FTSE All Share trackers are not a bad way to get long term exposure to the UK stockmarket. However, it's a weighted index meaning around 40% of your money will depend on the performance of the largest 10 companies – I think broader exposure including overseas, medium and smaller sized companies would be more sensible for most people. As would having exposure to other investment types such as property.

The fixed interest fund has performed poorly over the last five years versus the main FTSE gilt index. Coupled with the fact Virgin Money's website provides no information about the manager, nor which gilts and bonds are held in the fund, I can't find a reason to recommend it.

I do applaud Virgin Money's efforts to make pensions and investing more approachable and straightforward, but ultimately this pension is too simple for its own good. If you want a stakeholder pension then do yourself a favour and choose one with a wider fund choice.

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