Tax Exempt Saving Plans

Mutual_Bob

Which friendly Society has the best Tax Exempt savings Plan, which one pays the best returns.

ad44downey

None of them. All are rip-offs with massive charges.

Mutual_Bob

I have been told Sheffield Mutual have good pay outs, as they have a gauranteed sum assured ? what do you think.

ad44downey

There's normally 4 different sets of charges with them, a total con The tax-free bit is meaningless too

Mutual_Bob

What do you mean i have been told that tax exempt means it is free from taxation when it matures, and that they will receive a reversionary bonus each year that is added to the guaranteed sum assured is this correct.

dunstonh

They are free from any further personal tax but they suffer tax within the fund. That tax is usually no different to an ISA and often virtually no different than a unit trust (you arent going to suffer capital gains tax on £25 after all).

So, the tax free status of these is largely a gimmick and unfortunatly, the high charges most of these has (compared to unit trusts in ISAs or unwrapped) means that the tax gain is wiped out.

opinions4u

Mutual_Bob wrote: »

I have been told Sheffield Mutual have good pay outs, as they have a gauranteed sum assured ? what do you think.

I was told to buy HBOS shares at 508p. :eek: Don't always believe what you're told.

A guaranteed sum assured means that you know the absolute minimum that you will get back at the end of it. It will usually be an amount close to or less than the premiums you will pay in.

These plans are usually made up of high charges, low growth and inflexibility.

MacBiggles

The 'Yorkshire 3' always seem to outstrip both the friendly society and general insurance sector with their tax-exempt savings plans, a large chunk of which are invested in local authority-linked housing and ancilliary services -- a nice earner, but with their seriously 'ethical' orientation, they are less greedy and more willing to spend on maintenance and repairs than the buy-to-let slumlords. Nonetheless, the three -- Kingston Unity, Sheffield Mutual (the Old Druids) and Druids Sheffield (the New Druids -- only started in 1858 -- in Wath-Upon-Dearne nearer Rotheram) have trimmed their bonuses and maturity deposit rates in recent years. Still, I could leave money with any of them and not lose any sleep.