Market value reduction

SuW_2

I opened a with-profit bond in Jan 2001 & in Jan 2003 an MVR was applied - this I eventually climbed out of in November 07. I find today less than a year on another MVR has been applied "to protect long term savers" etc. Obviously miffed that this has occurred yet again I wonder how long a saver must I be before I am "protected"

fatpig_2

with-profits should be renamed with-losses. Avoid at all costs

Old_Slaphead

Or maybe as Very Inferior-Performing Index Tracker

dunstonh

With profits funds can actually be very good. There are some very good examples out there. There are more bad examples thanks to legacy contracts from closed or small insurance companies that no longer have the financial might to offer such a product.

Obviously miffed that this has occurred yet again I wonder how long a saver must I be before I am "protected"

MVRs are only charged on surrender (above the regular withdrawal limit). If you are not surrendering then you do not pay it.

Or maybe as Very Inferior-Performing Index Tracker

With Profits is closer to a balanced managed fund (or cautious managed with some).

WP is not some miracle fund that can allow you to only see the money go up all the time. It is subject to market conditions like all investments. There are degrees of capital security on certain events but its not capital guaranteed and its not a savings account.

fatpig_2

If the stockmarket goes up 10% you only get 5%. When it goes down 10% they apply a reduction of 10%. It's a total rip-off. They have been totally discredited in recent years as they are opaque investments

dunstonh

If the stockmarket goes up 10% you only get 5%. When it goes down 10% they apply a reduction of 10%. It's a total rip-off

Why is that a rip off? The net effect of MVRs have typically been less than the level of drops that have occurred and it only hits those withdrawing.

Why do you think you should get 100% equity performance when the funds are not 100% equity invested?

ad44downey

The companies that manage with-profit bonds can behave as they like so I wouldn't take one out myself. I've read so many dire tales about them over the last few years

dunstonh

I've read so many dire tales about them over the last few years

The problem is that most people mix up with profits funds and legacy contracts and think they are the same thing. So, you get a lot of misinformation out there.

I'm pro unit linked. I'm not a fan of WP but there are some good examples out there and its unfair to tarnish those good examples with the bad.