Norwich Union With Profits Portfolio Bond

Confused_Jo

I am hoping for a bit of guidance with this.

When my TESSA expired in 2000 I took my money, £5000, and put it into a Norwich Union With Profits Portfolio Bond as it was too much for an ISA. The return on this has been pitiful and the statement from the 5 year anniversary says total £5239!!!!!
:mad:
I don't believe I am tied in any more but having rung them I will get a MVR because it was taken out in 2000!!!

I am looking for something to stick my money in, not to touch but with a better return than this. I am open to all suggestions but want to maintain my initial investment. I currently have an ISA but have only used £1440 of it this year.

I also still have my Student Loans to pay off. They are the older sort that had its APR jump from 1.3 % to 3.2%, which you don't repay until you are paid 85% of the National Average. So I would have to be paid £24,137 PA before I need to pay this off. As I work for a government agency, it is not likely that I wil earn that within the next 5 years, (getting married, having kids, possibly working part time) before you take interest into account. Looking at the documents originally provided it says "as long as your are up to date with your credit agreement any remaining after 25 years (of starting the loan will be cancelled". I am currently able to defer it as I don't earn enough, although I could make the payments.The outstanding balance on this is £5706.14. I don't want to wimp out of my responsibiities but from a "money saving point of view", what do people think I should do.


Would I just be better off paying off my student loan with this lump of cash or keeping it stashed in a high interest account?

dunstonh

This old version back in 2000 would have a 10 year MVR exit point only (unlike the 5 year option available on later versions).

As an equity backed investment, your timing wasnt very good (with hindsight its always easier to judge what was right and what wasnt). However, some good news is that NU have been progressively decreasing the MVRs and increasing the terminal bonuses over the last 6 months and at this rate, pre-crash funds like yours should be clear of MVRs some point during this year.

Anyone investing in the same fund over the last 3 years would seen 6-15% pa. returns just to give you an idea of how bad it turned out your timing was.

I do have to wonder how you ended up in that product though with just 5k. Plus a Tessa could have been rolled into an TESSA ISA (on cash basis). That being said, had you gone say a UK FTSE100 tracker ISA fund, you would just about be breaking even with 5k this month, so it could have been worse. It could have been better though but it probably isnt fair to apply todays investment standards to 5 years ago. Things have moved on so much since then.

Confused_Jo

Thanks for the info. I will give myself until Jul 06. Can't say fairer than 6 months grace to see how it pans out?
I'll have to dig out the origianl paperwork for this to check the smll print.
It was originally with the Principality BS but this product then went over to NU.
Confused Jo :rolleyes:

Confused_Jo

I ended up with this product as the A+L had rolled over my TESSA into an TESSA ISA and it as reaching the deadline ot become an ISA and they were trying too get me to reinvest in an ISA .Being £5k it was too much and went to a couple of BS and this appeared to be the best deal. In fairness, when I went in I wanted my initial capital protected (although they protect the number of units you bought and not the price), the possibility of a better return than the ISA's were offering and I was able to lock it away for a minimum of 5 years.

Will let you know more once I've dug out the initial leaflets.
Finger crossed I'll get a better return.

Thanks again
Jo

missile

"I took my money, £5000, and put it into a Norwich Union With Profits Portfolio Bond as it was too much for an ISA."
Not so, I rolled over £6,900 TESSA to a TOISA with A+L. I have recently transferred it to Nationwide where rate is higher. Provided you do not withdraw the cash it remains a tax free investment plus you still have your ISA allowance for this tax year.

Co-incidently I also have a NU with profit portfolio bond, which I took out Jan 2002, it seems to have done considerably better than yours

Man-Alive

Confused_Jo wrote:

I don't believe I am tied in any more but having rung them I will get a MVR because it was taken out in 2000!!!

NU announced further MVR reductions on With-Profit Bonds on the 3rd of January this year. The average MVR rates applying to your year of purchase (2000), now stands on 8%.

NU have also said that their policy is to remove MVRs as soon as market conditions allow. So it would seem advisable to wait for further reductions this year.

Hope this helps!