DO UNIT-linked pension plans give a fair return to the investor? The short answer is: it depends on what you want.
Those planning for retirement should consider a pension plan. But you have to be certain you can afford the amount you put away each month and choose a realistic maturity date.
Investors should also be wary as some financial advisers are motivated by commission rather than determining what is best for the client.
Mr Ian Ferguson, head of financial services with Hill Samuel, described the unitised-linked pension plans as nothing more than savings schemes.
''What you have here is a clever piece of creative marketing. The fact is these so-called pension plans do not fall under any pension legislation anywhere . . . they are savings plans.'' Mr Miles Standish, director of the Towry Law Group, said: ''Like any investment, if these products are used correctly they can be very beneficial.
''But it is no use taking out a 20-year pension plan and deciding after five years you can't keep it going. If anyone has any doubt about his or her ability to fund such a plan, opt for a lower premium because you can always increase it later.'' He said one attraction of the unit-linked pension plan was the ability to switch between funds without extra charge.
Mr Peter Saunders, the Far East general manager for Royal Life, said: ''These pension plans are not designed for short-term savings and to be of any real benefit they have to go through to term.'' Royal Life pension plans offer a range of benefits such as free-switching between funds and investor protection.
