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Pension performance challenge

Intelligent Money has issued a 10,000 challenge to Standard Life that its low-cost pension theiaccount will outperform Standard’s managed pension fund by the end of the year.

Intelligent Money chief executive Julian Penniston-Hill’s challenge, which would see the loser donate the cash to charity, follows Standard’s heavy criticism of its 35 pension earlier this year.

Penniston-Hill believes the formula used by the theiaccount would have achieved double the return of Standard’s fund over the past 10 years.

But Standard has hit back, saying that theiaccount cannot make claims about how it would have performed in the past or compare itself with the performance of a different type of fund.

theiaccount operates as a Sipp, charging a flat fee with contributions held on fixed-term deposit. The interest from this account is used to buy options on funds linked to house prices and equity indices.

Penniston-Hill says: “We openly challenge Standard Life that by the end of this year the annual return from our form-ula will be greater than that of their managed fund.

“IFAs and consumers alike have been badly let down by the pension industry. For years, insurers have had a monopoly and gotten away with offering poor value.”

Standard Life managing director (marketing) Barry O’Dwyer says: “Intelligent Money should be clear about some key facts about their proposition, for example, the hidden charges associated with any inflexible structured product such as the cost of financial instruments such as options.”


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