NU imposes 22% endowment surrender penalties

EdInvestor

http://www.ifaonline.co.uk/public/showPage.html?page=ifa2006_articleimport&tempPageName=821613


Click the link for which year gets hit for what penalty.

baby_boomer

Nothing to worry about.

As dunstonh said the other day, never mind the MVR, feel the bonuses :rolleyes:

setmefree2

Hi Ed:hello:

What's a LAP fund please - as in NULAP fund. I have an endowment with NU due to mature May 2012

Thanks

SMF2

dunstonh

Dont worry about the MVR if you are holding to maturity. It's only levied on surrender. It was expected and a number of other providers have done the same. Bonus rates have not been changed.

Milarky

dunstonh wrote: »

Dont worry about the MVR if you are holding to maturity. It's only levied on surrender. It was expected and a number of other providers have done the same. Bonus rates have not been changed.

If that is the case then the MVR is just a cheaty way of cutting future surrender values. To say that two 'identical' investments - except that one is contractually due today and another at some future time differ in value by '22%' is rubbish. It's what Enron did. What will happen in practice is that 'bonuses' will be cut next year, the following year (and so on) to pay for the 22% 'extra' which some policyholders have started to receive. I'm saying that these schemes (no that's 'schemes') redistribute equity (i.e. value - what your money has earned alongside other policyholders) which in any other scenario would be called Enron-style fraud and someone would go to jail for - and no one would try again. But these 'schemes' have actually been sanctioned by the so-called 'watchdog' - the FSA. The FSA are themselves just ex 'schemey' types who know where the bodies were buried and so only ever conduct nugatory forays into regulation of business activity. They feel much happier painting the stable and fixing the door hinges (to attract attention away from) the real swindles.

Of course dunstonh's going to come along in a minute and say that NU is a 'well run' firm. Quite so, but the business they're in owes more to Al Capone than Adam Smith

sdooley

MVR = market value reduction

They are reducing payouts to people who want to leave now because they have a whole landslide of redemptions threatening if they don't. The strategy may work if people stay invested and markets recover. But if they don't recover then prospects for future bonuses look slim.

EdInvestor

http://www.citywire.co.uk/adviser/-/news/market-and-shares/content.aspx?ID=318248&re=3999&ea=156896

Friends Prov also to impose MVRs, amounts as yet undecided.

Earlier this year FP cut maturity payouts by 10%.

Latest newsis that payouts are expected to come down 20%.

So anyone at these firms (and the Pru/ScotAmic) whose policy matures soon is now screwed - if they go earlier to avoid the maturity cut they will be hit by the MVR.

dunstonh

So anyone at these firms (and the Pru/ScotAmic) whose policy matures soon is now screwed - if they go earlier to avoid the maturity cut they will be hit by the MVR.

Pru imposed MVRs a while back. They didnt reduce terminal bonuses though. So maturities and deaths have no issues.

setmefree2

Milarky wrote: »

Quite so, but the business they're in owes more to Al Capone than Adam Smith

I would have to agree with you, I'm afraid the financial sector has been shown to be rotten to the core. A great number of "bankers" have walked away from this "credit crisis" with millions each while the average Joe has been left with massive personal debt and governments owing trillions. It's the greatest scam of all time...








Anyhoo, does this mean I couldn't get my money out of my NU endowment even if I wanted to...:rolleyes:

Dick_here

EdInvestor wrote: »

http://www.citywire.co.uk/adviser/-/news/market-and-shares/content.aspx?ID=318248&re=3999&ea=156896

Friends Prov also to impose MVRs, amounts as yet undecided.

And CIS have done the same thing... :mad:

http://www.cfs.co.uk/servlet/Satellite?c=Page&cid=1199261362641&pagename=Corp/Page/tplCorp&currart=1223017182708&currmth=10

EdInvestor

Scottish Widows joins the party

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3236569/Up-to-8m-savers-see-nest-eggs-cut-by-thousands-by-with-profits-firms.html