Selling with-profits bond AXA

TomPearce1984

I have a with profits bond with Axa sunlife that i have had for 21 years plus. It has now come to the time that i need to sell it, i just wondered how it would best be to go about selling this, is it best to sell it to AXA or is there another way that i will get any better return.

I have been paying £10 per month for the past 21 years, what should be a good return on this?

Also just turing self employed what will the tax implications be? and how will they effect me?

Your help is much appricated.

Tom

ReportInvestor

You don't normally pay monthly premiums into a WP Bond, but you could be correct.

Are you sure it's not a 25 year WP endowment policy?

Do you have any recent projected returns from the company?

If it's a WP Bond, there might be tax to pay if you are a higher rate taxpayer or close to the limit.

TomPearce1984

it deffinatly is a WP bond and dont think it had a set time on it i just know it was set up for a long run.

ReportInvestor

Did you make an initial investment at the start or has it just been the £10 per month for 21 years?

Do you have any information from a recent statement?

It looks from your name that you might have had a thoughtful parent .

FWIW I had a SunLife policy from about 1985-95 and the returns were lousy .

dunstonh

You are correct that you do not make regular payments into an investment bond. Indeed, to give an open ended investment bond its correct title, it is a "non-qualifying, single premium whole of life assurance".

Now, to tie this down a bit more because there is some conflicting information here:

1 - Is there a maturity date?
2 - Is there any life assurance?
3 - Is it a whole of life assurance policy that accrues a savings element (that is designed to pay for increased premiums later in life, rather than savings)?
4 - Is there any reference to maximum or minimum or standard/medium on the policy?
5 - Is it actually in with profits or is it unit linked?

My initial guess is that this is a whole of life assurance rather than a pure savings plan. The fact it is open ended and the year that it was taken out would suggest that. At that time, savings endowments or MIPs would have been used for long term savings.

TomPearce1984

ReportInvestor - At the start there was no investment as such just the regular £10 per month, the last statement was from 2004 with a terminal bonus of 10% the total bonuses are valued at £6548.12 and yes they have been given to me in gift from family for deposit on my first house.

dunstonh - The maturity date on the last statement is set at 15/02/2049, i am pretty sure it is with profits cause it seems to say there everywhere on the statement. as for the other questions i cannot see anything anywhere about them.

many thanks for your help.

ReportInvestor

7% pa on £10 pm gives £8,120 after 25 years.

6% pa gives just under £7K.

£7K would be a real disappointment for an investment started in the mid 1980s.

After all, 6% is the average quoted by insurance companies in the current low interest rate environment.

dunstonh

It sounds like a whole of life policy with that information. Not a savings plan. Many whole of life plans have an investment element but they shouldnt be mistaken for savings plans.

TomPearce1984

ok thank you both for your help, just another quick question, is it best to sell it back to axa or is there another way to get a better rate on them if so where do i go, also will i be taxed on this amount and will it effect me as i am self employed?

ReportInvestor

dunstonh wrote:

Many whole of life plans have an investment element but they shouldnt be mistaken for savings plans.

The Norwich Union advisor who tried to sell me one of these when I wanted a savings plan didn't make the distinction quite as clear as that .

To answer one question, I don't think there is a second hand market for whole of life policies as opposed to with profits endowments. I doubt any adviser would have mentioned that, either.

Tax? I don't think there's an issue, but dh will confirm.