# Have a 9yr old PEP from Ark Life & no growth; Should I cash it in?



## apple1 (15 Jan 2008)

Looking for some opinions folks.  I have approx. €17K sitting in an old Ark Life PEP that's about 9 years old. The current value is very marginally above the sum total of my contributions down through the years (which doesn't surprise me given state of stock markets & most of my contributions were at the height of the dot com bubble).  What I'm wondering now though, is should I just take the hit & cash the policy in or hold out until markets recover (god knows when).  If general concensus is cash it in, should I use the €17K to:
a) Reduce o/s mortgage balance (currrently paying 5.65%)
b) Put in one of the high interest deposit a/c's (FA esavings and/or Halifax 5.15%)?

Appreciate any opinions.  Thanks in advance, apple1


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## ClubMan (15 Jan 2008)

Is this an open ended investment or could there be some bonus on some (e.g. 10th) anniversary?
What is it invested in?
What per contribution, ongoing and encashment charges (other than exit tax of 23% on growth if applicable - i.e. a gross rather than a net fund) apply?


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## apple1 (15 Jan 2008)

Clubman, thanks for the response.  I'll attempt to answer your questions as best I can.
There is no bonus on 10th anniversary.
The fund is invested in a range of equities, both Irish & international.
As regards charges etc., I ceased contributing a number of years ago, and believe (maybe naievely) that only the 23% tax on growth applies??


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## whatsmoney (15 Jan 2008)

the tax is already deducted from this. when you cash this in you get what the balance states. i cashed mine in in 2006 unfortunately before the iseq soared.  this was a terrible product and i wld never go near ark life again. 
although ark life did improve i believe once hibernian 'took' them over. from what i remember there was a 5% bid/offer spread and an annual charge of 1.5% on this product.


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## ClubMan (15 Jan 2008)

apple1 said:


> As regards charges etc., I ceased contributing a number of years ago, and believe (maybe naievely) that only the 23% tax on growth applies??


Not necessarily - it could be a net rather than gross fund in which tax is already deducted and reflected in the unit price. A bid-offer spread of up to c. 5% could apply on unit pricing (i.e. units are sold for 5% less than the price at which they are bought). There could be an ongoing monthly policy fee paid for by automatically encashing units. There is almost certainly an ongoing annual management fee.


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## apple1 (15 Jan 2008)

Thanks Whatsmoney.  What would you recommend to my questions in the original post?


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## ClubMan (15 Jan 2008)

apple1 said:


> What would you recommend to my questions in the original post?


Depends on a many factors - e.g. your overall financial situation, existing debts/savings/investments, short/medium/long term plans and finances for funding these, attitude to risk/volatility etc. etc.


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## Markjbloggs (15 Jan 2008)

Apple1,

my opinion is that this product has had very poor performance over your nine year timeframe, notwithstanding the contributions at the time of DotCom.  ISEQ, S&P 500 and most other averages have soared in the timeframe, so why has this done so poorly - is it invested largely in tech stocks or has it taken a hit recently with the demise of the ISEQ?


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## whatsmoney (15 Jan 2008)

Hi Apple1,
I remember after about 2 years (i started it in 1998) i was down about 5k.
It was atrocious. I stuck with it in the hope that it would eventually over time regain its losses, and it did. I exited in 2006 with what i calculated was equivalent to a deposit rate of about 3%/year. Granted the ISEQ took off shortly afterwards, and I would have gained a bit more, but now the ISEQ is back to what it was when I cashed in. it depends on yourself. I personally dont think the ISEQ is going anywhere in the short to medium term, and from what I remember this product was roughly 60% ISEQ, and 40% bonds and deposits. I think that if you want to leave it in long term, then it may pay off, but if you are looking for no risk and decent return, you could open several regular saver accounts and feed the total sum in gradually each month, getting 7% return rate. See the best buys section. Personally that is what I would do.


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## whatsmoney (15 Jan 2008)

Just reread you post, and I think paying off the mortgage is probably a better idea!


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## apple1 (15 Jan 2008)

Thanks whatsmoney for the replies.  I'm leaning towards your suggestion.


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