which tax free savings plan to choose

resilie · 19 May 2013 at 9:33PM

Hi there
I am thinking about taking out one of those tax free regukar savers of £25/month that comes with life assurance but really struggling with sourcing any independent information and performance data. Can anyone who has used a similar product in the past give me some advise please.

Thanks

innovate · 19 May 2013 at 10:01PM

They are generally a bad idea because you pay someone else a lot of money for things that are freely available for free.

Have you got a link to the plan you are contemplating?

Can you share some more information about yourself - your age, do you have dependents, do you have a rainy day fund, are you working, do you contribute to a works pension, what financial risks are acceptable to you?

jimjames · 19 May 2013 at 10:54PM

There are far cheaper, better performing and more flexible options out there. The tax free banner is pretty irrelevant to most people if you are not a higher rate taxpayer. You may well find it cheaper to get life insurance separately if you need that and get a better investment product such as an ISA or investment trust savings scheme.

bigfreddiel · 19 May 2013 at 11:03PM

resilie wrote: »

Hi there
I am thinking about taking out one of those tax free regular savers of £25/month ......

Thanks

absolutely the worst thing you could ever do - i did this - a 10yr tax free scottish bond - fees way to high and hidden - 10 yrs ago I didn't know what i know now.

my advice - do one of these with your £25/month

over pay your mortgage

pay into your pension

open a sipp and pay into that
or
open a S&S isa and pay into that

in the isa and sipp opten invest in a vanguard lifestrategy 60 acc fund

any of the above will generate a better return than the saver you're looking at

fj

dunstonh · 20 May 2013 at 9:13AM

I am thinking about taking out one of those tax free regukar savers of £25/month that comes with life assurance but really struggling with sourcing any independent information and performance data.

We have been issued compliance warning information that we should not recommend them and that they would likely be classed as mis-sales nowadays.

They are woefully out of date. Inflexible and expensive and frequently the investment option is dire. A stocks & shares ISA would trump it nearly every time.

resilie · 20 May 2013 at 10:37PM

Thanks guys for all your help- looks like that's out the question then. ?. The reason why I was thinking about this was that my parents took out a form of life insurance that paid out after 25 years of payinf into it and it was a considerable amount of money
I have recently cancelled my income protection insurance as paying 40 quid/month for NO return unless I'm basically permanently disabled seemed rather steep
I am a higher rate tax payer with no dependents paying into the NHS pension scheme... already overpaying the mortgage and cash ISA is maxed out for this tax year... hmm unsure what to do investment wise now...

dunstonh · 21 May 2013 at 8:49AM

The reason why I was thinking about this was that my parents took out a form of life insurance that paid out after 25 years of payinf into it and it was a considerable amount of money

And you can still do that with a stocks & shares ISA. The Friendly society savings plan is obsolete by about 18 years. It would be like buying a black and white TV. yes, you would be able to watch television. So, it would do its job but there are so many better options.

I am a higher rate tax payer with no dependents paying into the NHS pension scheme... already overpaying the mortgage and cash ISA is maxed out for this tax year... hmm unsure what to do investment wise now...

So, pension and S&S ISA are the most likely tax wrappers to use then.

I have recently cancelled my income protection insurance as paying 40 quid/month for NO return unless I'm basically permanently disabled seemed rather steep

Insurance shouldnt have any return unless you suffer a claimable event. Insurance is always seen as a cost until you have to claim.

which tax free savings plan to choose

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