Prudence Bond with-profits

pnaj

Hi,

I'm just trying to help my mother to work out what to do with her investments. My father, who died recently, would have been doing this up til now.

The main question is what to do with a prudence bond that has been running since 1992. However many times I try and read about it, I can't seem to get clear in my mind what the actual value of the bond is.

Can someone help us to understand how to interpret these investments?

As a starting point, on the last statement, the cash-in value was c. £95K, but included in that is a final bonus of c. £34K. Can someone interpret what these figures actually mean ... I would be most grateful.

Thanks,
Pnaj.

dunstonh

Can someone help us to understand how to interpret these investments?

Any IFA should be able to help.

As a starting point, on the last statement, the cash-in value was c. £95K, but included in that is a final bonus of c. £34K. Can someone interpret what these figures actually mean

There have been different versions over the years. Each is slightly different. One of that era is probably based on a basic value to which the annual bonuses and the final bonus is added to. The annual bonus is guaranteed but the final bonus can fluctuate.

Typically these Pru plans have been very good.

mjmal51

I cashed one a couple of years ago with a similar vintage. It had performed well. Seem to remember that I phoned the Pru to tell me the cash in value. As said above the annual bonuses were guaranteed and the terminal bonus is detemined at the day of cashing it in.

baby_boomer

dunstonh wrote: »

Any IFA should be able to help.

There have been different versions over the years.

Brilliant isn't it. On what should be a straightforward investment sold in vast numbers direct to the general public we need an expert interpreter with inside information to make head or tail of it :eek:

With profits investments. Dontcha just luv em?

dunstonh

Brilliant isn't it. On what should be a straightforward investment sold in vast numbers direct to the general public we need an expert interpreter with inside information to make head or tail of it :eek:

People buy cars but how many can service the engine?

With profits investments. Dontcha just luv em?

Pru ones? Yes I do and you wont find many Pru with profits holders that wont agree.

baby_boomer

dunstonh wrote: »

People buy cars but how many can service the engine?

The correct analogy between with profits and cars, is that it's the equivalent of having to employ a mechanic to read the mileometer .

Rhymsta

The only way you are going to get a real answer to this is to phone them up. If it's on behalf of another person they will need to be there to answer the security questions and then put you back on the phone. You just need to ask what the current cash-in value is and also ask if there is an MVA (Market Value Adjuster) in force at present.

Having said all that - I and my parents have decided to stay with the Prudence bond as it is really is just about the best with profit bond there is and now they have definitely decided not to distribute the inherited estate there is even more finacial strength there.

You could also ask about taking a regular payment from the bond.

baby_boomer

The answers to those questions would provide a partial picture of the situation.

There is a slight misunderstanding here. I'm not knocking Prudential - I actually have my only remaining WP investment with them.

I'm knocking the fact that when you want to realise with profit investments, especially in a market slump, everyone is clueless about whether it's the right thing to do or not. You just have to search the Axa Sunlife threads for proof of that.

The smokescreen the companies put up is deliberate.

They use uncertainty to hang onto more of our money. And it also helps IFAs retain or attrack business.

pnaj

Hi All,

Thanks very much for your responses.

Sorry for appearing so dumb, but the terminology can be confusing.

When I call the Pru and they tell me a cash-in value, is that the amount that would actually be paid out. Or would a further MVR calculation need to be made on the final bonus bit ... it's not clear from the terms (which I have tried hard to digest) what comes first.

Thanks again.
Pnaj

dunstonh

When I call the Pru and they tell me a cash-in value, is that the amount that would actually be paid out.

That is correct.

Or would a further MVR calculation need to be made on the final bonus bit

It should be included. However, the Pru system shows the values after each thing. So, as long as you have been told the full encashment value, then that would have been what it was on that day. I have known them only to refer to the value without final bonus and MVR at times (including one as recently as 2 weeks ago).

pnaj

Hi Dunstonh,

Message received ... many thanks again.

Really pleased I came and asked.

Pnaj