AIB PIP's - Can anyone explain them in English

veryangryman

Right so...I took out one of these last year, and have been paying just shy of €300 monthly. I was advised to leave it in for circa 10 years to get a decent return.

A few questions have arisen since...

How do i know how it is performing at the moment (im assuming bad given the current market conditions). They dont seem to send in statements or anything. How do they work
Is it a huge gamble leaving it in that long?
Oth info would also be cool :pac:

veryangryman

Pah - typical. No financial advcie anywhere

Ya pays yer money ya takes yer chances

Time Magazine

veryangryman wrote: »

Pah - typical. No financial advcie anywhere

Ya pays yer money ya takes yer chances

Once you're not under the impression that anything said on this forum constitutes financial advice, all is well. Opinions are welcome.

That said, your query is very specific and probably won't get as many replies as the average thread here.

veryangryman

Not really looking for advice, just explanations/peoples own experiences...

veryangryman

veryangryman wrote: »

No financial advcie anywhere

You should have received financial advice on this product when you put it in place. You should have received a 'Reasons Why' letter, stating why this product was suitable for you at the time.

It may also help if you took a look at the disclosure documentation detailing estimated fund values after certain periods and how the charges on the policy effect your return.

I would say that AIB are taking up to 5% of each contribution that you make and a further 1.5% for actively managing your money. These charges are ongoing and entitle you to receive further advice from the bank should you need it.

Your €300 minus the 5% is buying units in a fund/s every month. If the price of the units increases the value of your policy increases. You would also buy less units next month as the cost of each unit has increased.

If the price decreases your value decreases but you will buy more units because they are now cheaper. This happens every time you buy and the idea is that you hold the units long term in the hope that the value increases over time.

If the above charging structure is correct, the return to you will be reduced by about 2% per annum as this is the effect that high charges have. So, if the fund increases by 6% this year, you are going to end up with 4%.

You should get an annual statement detailing the number of units that you hold and the current value at that time.

If you are happy to continue with AIB you should really be hounding them for the information you require.

There are cheaper options out there for the level of contribution that you mentioned. If you had a lump-sum to kick start the plan your options open up further.

I hope this helps.

skynol

I know its late in the day but if you are still interested in know how your PIP is doing - if you have AIB internet banking you can see your balance/performance online - which might be a bad thing in the current climate!!!! :mad:

veryangryman

Has anyone made any money on these in the past from doing them long term?

veryangryman

Bump.

Another Q springs to mind.

Is it worth continuing to increase contributions (as they automatically do) every year? Or should i tell them to smeg off and that im paying enough?

ntlbell

veryangryman wrote: »

Bump.

Another Q springs to mind.

Is it worth continuing to increase contributions (as they automatically do) every year? Or should i tell them to smeg off and that im paying enough?

maybe it might be a good idea to call the bank and sit down with a "PIP" advisor go over the current state of the account and see where they see it in the next few years then make a decision on it

veryangryman

Well ive had it nearly 2 years.

Its current value is 70% of what ive put in :eek: Jumping ship now would be like accepting the hit, but continuing on could make the hit a body blow.

If one sees the markets as improving in the next 5 years, then im happy to wade it out till then.

Hesitant at the moment because its a shedload of money that could come in handy in future.

One thing for sure: These things are worse than gambling

veryangryman

veryangryman wrote: »

Is it worth continuing to increase contributions (as they automatically do) every year?

If they are taking up to 5% off every increase in contribution that you make, probably not.

BMurr

I took out one/continued from my SSIA after I cleared out the SSIA funds. I put just 100 in per month and it is now worth 1300 NET. It was worth 655 NEt last year so 12 months at 100 a pop has given me the pleaseure of a loss of about 550 euros NET :eek:. I am well capable of losing money myself without any assistance from a bank so I think I'll just cut my losses and get the cash before they waste the whole lot for me.

veryangryman

Im noting that things are improving slightly in the market.

Previously my PIP held 66% of the value i had put in. Now its ~74%. Hopefully this would continue, although i HAVE vowed to grab it with my arms the second it reaches 100% (whenever that may be) regardless of financial advice. At least the money saved can be put to good use (or placed on black at the nearest roulette machine. Second thoughts place it on red cos im in the red )

veryangryman

veryangryman wrote: »

Im noting that things are improving slightly in the market.

Previously my PIP held 66% of the value i had put in. Now its ~74%. Hopefully this would continue, although i HAVE vowed to grab it with my arms the second it reaches 100% (whenever that may be) regardless of financial advice. At least the money saved can be put to good use (or placed on black at the nearest roulette machine. Second thoughts place it on red cos im in the red )

Sorry to bump but would be good to get others opinions. Now am up at 77%.

dotsman

Ultimately, the reason it's considered a long term investment is that it will be a bump ride along the way. It may continue increasing to the 100% and well beyond, and then fall again!. The longer you leave it, the smoother the ride in the long term, and the probability of it the exit amount being higher than the initial amount.

Afriad nobody here will be able to give you decent financial advice, as we don't know your details, nor the precise details of your PIP (Besides, even if we did, we're not allowed:)).