Need help with investing/saving £100,000

whiteflag_3

ReportInvestor wrote:

Interesting, dh.


I wonder why NU made the terms worse recently? Perhaps they realised they can't promise investors that they can have their cake and eat it as with profits has tried to claim over the years.

So just to confirm for potential investors.

The current with profits element of the NU Portfolio Bond does not have any MVR free window of opportunity, even if you pay extra for the "guaranteed" version

Hi Dh & RI

Just read the thread , cant see where the OP said they are invested in with -profits fund . Could it be they are in the Guaranteed Fund (3 versions) which has a year 5 capital guarantee, but obviously not saddled with MVAs

cheerfulcat

dunstonh wrote:

Interest paid on a deposit account is added to the capital. If you make a withdrawal, you are removing that capital. One may have units, the other not but in both cases, you are withdrawing capital.

Ed was making out that a negative on a bond was if you draw out more than you make the bond value would decrease. However, that would apply to any product, not just bonds. Hence my rebuttal.

These "bonds" are set up in such a fashion that the investor is positively encouraged to take the full 5% "income". And your bank account comparison is wonky . Anyone taking an income from a deposit account is more likely to have the interest paid out monthly than to be taking regular bites out of the account.

dunstonh

I wonder why NU made the terms worse recently? Perhaps they realised they can't promise investors that they can have their cake and eat it as with profits has tried to claim over the years.

As the recovery started, any guarantee as such would be pretty useless as it would have to drop below that level again after 5 years. Possible but extremely unlikely. So it was an easy marketing give away.

The current with profits element of the NU Portfolio Bond does not have any MVR free window of opportunity, even if you pay extra for the "guaranteed" version

The current guaranteed version does have exit points without penalty on the 5th and 10th anniversary within 2 windows.

These "bonds" are set up in such a fashion that the investor is positively encouraged to take the full 5% "income". And your bank account comparison is wonky . Anyone taking an income from a deposit account is more likely to have the interest paid out monthly than to be taking regular bites out of the account.

I'm sorry. I dont see where it is wonky. If the savings account makes 3% and you draw 5%, your capital will decrease by 2%. If the bond makes 3% and you draw 5% the capital will decrease by 2%.

I am not on about the workings of it but the principle that if you draw more than it makes, the capital will decrease. There is no difference on the bond or the savings account in that respect and Ed was wrong to suggest there was.

cheerfulcat

The difference, as I said, is that these things are set up so that you withdraw the maximum allowable ( for tax purposes ) 5% "income". Also that the money is coming *directly* from capital - taking the interest from a deposit account as an income is quite a different thing.

montycat_2

whiteflag wrote:

Hi Dh & RI

Just read the thread , cant see where the OP said they are invested in with -profits fund . Could it be they are in the Guaranteed Fund (3 versions) which has a year 5 capital guarantee, but obviously not saddled with MVAs

Hi ,I have a Portfolio level Option Bond Guaranteed 3 series 4 .Shoud i have mentioned that earlier ? lol

whiteflag_3

montycat wrote:

Hi ,I have a Portfolio level Option Bond Guaranteed 3 series 4 .Shoud i have mentioned that earlier ? lol

Makes sense > the risk profile of this fund would appear to be spot on for your needs. Hope your werent to worried by all the chat about with profits, MVas etc, as they do not apply to you :j

montycat_2

Lol,No i wasn't worried at all.As I said ,I was happy with the choice I made .
It did make me re=read my policy though .
Now ,if I had been more specific this was thread would have been boring and straightforward .
Jem,if you are still reading ,it is worth looking into

EdInvestor

dunstonh wrote:

montycat, Ed is anti financial advisors and insurance companies.

Nope, I'm not anti them, per se.I just like to try to keep them honest.;)

They do tend to be just a touch 'economical with the actualite.'
As is quite obvious from the thread, methinks.

The "Keep it Simple" principle is one I always like.
Never buy, or invest in, anything you don't understand.

That will rule out "With profits" products for a start, because nobody understands them, including the actuaries who design them, and the FSA.

dunstonh

They do tend to be just a touch 'economical with the actualite.'
As is quite obvious from the thread, methinks.

Coming from you thats really funny.

That will rule out "With profits" products for a start, because nobody understands them, including the actuaries who design them, and the FSA.

Modern UWP funds are quite easy to understand. Especially getting into one without an MVR, such as one offered by Pru. It all depends on whether you want to understand them or not or just prefer to snipe at them basing your views on assumptions which may or may not be correct.

ReportInvestor

whiteflag wrote:

Hi Dh & RI

Just read the thread , cant see where the OP said they are invested in with -profits fund . Could it be they are in the Guaranteed Fund (3 versions) which has a year 5 capital guarantee, but obviously not saddled with MVAs

Good spot wf . I was going on Dh's assumption below, which went uncorrected by the owner of the bond (not the OP) until just recently.

dunstonh wrote:

The NU portfolio bond is a very good bond wrapper and offers hundreds of fund links. The guaranteed option is with profits.