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PEP and PIP - AIB ARK LIFE

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    #32
    daveg
    Registered Users Posts: 4,683 ✭✭✭daveg


    The account is with Irish Life....

    I'll check to details over the weekend and I'll post back.


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    #33
    hamster
    Registered Users Posts: 1,766 ✭✭✭hamster


    Hi daveveg,

    Can you outline the charges on your PIP/PEP product?

    Watch out for charges. These WILL reduce the overall return on your long-term investment.

    Out of the 50 Euro per month I suspect you are being charged similarly as follows:

    i) 5% of that is taken away in the form a bid/offer spread charge: 2.50 Euro
    ii) A 1.5% Annual Management Charge (deducted in a monthly basis) on the ENTIRE FUND's worth.

    If you could check if that would be great. Are you sure it's only 50 per month? By default they tend to get you to increase the contribution by 5% per year. If there is a so-called monthly policy fee of 2 Euro (or similar) then this is a quite high percentage charge against 50 Euro.

    Since you started this 2 years ago the PEP/PIP is a NET fund. This means that any profits in the fund is taxed (base rate) and paid for every year. Since January 2000 all new funds created are
    in a GROSS ROLL scheme meaning that you only pay 23% (basic rate + 3%) when you actually decide to withdraw. This advantage allows any profits internally to contribute to further growth.

    I believe it is a good time as any (certainly up to 40% better than 3 years ago) to invest for the long-term. Drip-feeding every month gets money in during the bad times and the better times and averages out the long term.

    Even better, still re-direct the 50 Euro into a cheaper fund like Quinn Life. The only charge is an annual management charge of 1% and a unfortunately a monthly policy fee of 2 Euro. Check with them for the latest.


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