Tieing money up for 5yrs

kjmtoday · 1 May 2009 at 11:34AM

Would you agree that its best to wait before committing to a long term growth say with L&G for eg.

Things improve and then better offers. These 5yr deals do they make money and can you lose your investment even though they say 100% capital guaranteed. I have done this and regret it, its letting some body else play with your money.

dunstonh · 1 May 2009 at 11:51AM

Would you agree that its best to wait before committing to a long term growth say with L&G for eg.

Wait for what?

Things improve and then better offers.

If you are talking investments then waiting for things to improve means you mis the growth. For example, the markets are already over 20% up on their low point.

These 5yr deals do they make money and can you lose your investment even though they say 100% capital guaranteed.

Crystal ball job. Typically they are at their best when bought when the market is low. However, the cost of guarantees is high at the moment which means the terms offered at not as good as recent years.

its letting some body else play with your money.

No its not. GEBs have defined terms set at the outset. So, you know exactly what you are going to get as a minimum and often as a maximum. You may not know what future returns will end up being but thats no different to savings accounts with variable interest rates. (assuming you mean GEB and not a unit linked plan with a variable return but capital security on 5th anniversary - L&G offer both types).

Only on unit linked investments or direct investing are the investments out of your control but then you can still control who you place them with and what areas you invest in. However, you accept that with the view to obtaining potentially better returns.

kjmtoday · 1 May 2009 at 12:08PM

I put 50 k into L&G capital protection growth bond (with 5ys guarantee)
but feel very uneasy and i think would have been better placing into building society wher i can still see it. rates will go up...

dunstonh · 1 May 2009 at 1:34PM

Ahh, I remember the thread. The L&G product you bought isnt very good but you used a tied sales rep from A&L. You are still within the cancellation rights period so excerise that right if you arent happy.

That said, dont rule out the concept of investing. You just need to understand it more. You can still see your money with investments. However, ther return is likely to be variable (unless you choose a fixed rate investment). Just as savings interest rates are variable.

Reaper · 1 May 2009 at 2:05PM

This is the 3rd thread you have started on the same subject.

You started by buying an investment and are now having second thoughts about it which is a back to front way of doing things.

Start by deciding what type of product you want. eg
1) Investing directly in the stock market - Best done for the long term. Maybe the best returns but your original capital is at risk
2) A GEB/GIB - Locked in typcally for 5 years. Your capital is largely protected (though check the small print) but you pay for it by receiving smaller gains, maybe even none.
3) A savings account - capital 100% safe. Some growth will be made though it will be small.
NB There are other options, but these are the ones you have been mulling over.

Having chosen which type of product you want then look for which particular company to go for (eg L&G, West Brom).

In answer to your original question there is no reason to delay investing if that is the option you choose. Whether the stock market is high or low you still won't know which direction it is going to go in the future. Nobody does.

kjmtoday · 1 May 2009 at 2:38PM

Yes thats correct.
Guess not very financially minded so not going to invest.

Bogof_Babe · 1 May 2009 at 3:59PM

dunstonh wrote: »

Ahh, I remember the thread. The L&G product you bought isnt very good but you used a tied sales rep from A&L. You are still within the cancellation rights period so excerise that right if you arent happy.

Eek, could you provide a link to this thread please, as we have just (two weeks ago) committed a hell of a lot more than £50K into a L&G portfolio of Gilts and Corporate Bonds, on the advice of a A&L financial "expert".

I think she said there was a 30 day cooling off period, so I am nervously thinking now that maybe we have done the wrong thing. I'd love to know which L&G products the OP took out, while there's still time to undo any potential damage.

kjmtoday · 1 May 2009 at 4:28PM

its was a 5ys capital protection growth bond legal and general. they say no risk and the worst is i will just get my money back after 5ys. So decided now not wanting, not saying that its no good just not for me.

Reaper · 1 May 2009 at 4:50PM

Bogof_Babe wrote: »

Eek, could you provide a link to this thread please

http://forums.moneysavingexpert.com/showthread.html?t=1654825

Bogof_Babe · 1 May 2009 at 4:53PM

Thanks. I don't seem to have that one among the five that our money was spread between. I suppose they bring out new ones and change around what they recommend on an ongoing basis.

We were told 90% of our capital was guaranteed safe, which doesn't sound as good as your 100%, but then we were also told our package was geared to maximum returns.

It's all far too complicated isn't it?

dunstonh · 1 May 2009 at 4:54PM

Eek, could you provide a link to this thread please, as we have just (two weeks ago) committed a hell of a lot more than £50K into a L&G portfolio of Gilts and Corporate Bonds, on the advice of a A&L financial "expert".

You didnt see a financial expert. Your saw a tied sales rep working for A&L who is authorised to sell L&G products.

Look quickly as you are still within the cancellation rights period and markets are up so you shouldnt suffer a loss if you change your mind. Don't act on what you read here alone as we dont know what you have. However, we do know that A&L retail L&G products at full commission cost, use sales reps with low investment experience and authorisation and the product can be easily beaten in price and features by an IFA or DIY (if you think you can do it yourself). Dont let it put you off the concept of investing. You just bought from an expensive distribution channel with a limited range of products available.

Tieing money up for 5yrs

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