Ofshore Bonds

lolly5648

It has been suggested that apart from our rainy day money we should be putting as much of our savings as possible in an offshore bond. Apparently this money will be guaranteed through each of the individual deposits.

Anybody got any views on this?

nrsql

Be careful.
Lehman's issued guaranteed growth bonds which advisors advertised as guaranteed by the US. Turned out they weren't and the investors are waiting to see how much they get back from the administrators. The advisors are saying they were misinformed and are being investigated - they might be liable.

Which products are you thinking of?

tradetime

lolly5648 wrote: »

It has been suggested that apart from our rainy day money we should be putting as much of our savings as possible in an offshore bond. Apparently this money will be guaranteed through each of the individual deposits.

Anybody got any views on this?

What is so special about an "offshore bond"? I am unfamiliar with these products
Thanx

dunstonh

The offshore bond may not offer any protection in the form that the FSCS offers.

lolly5648

My financial advisor said that as the returns on savings are so poor he would recommend offshore bonds. He is going to send me recommendations in writing. I will post again when I know more although at the moment I think safety is more important than interest rates.

HopefulWishMoneyMaker

Looking forward to your recommendations as it might be something of interest. Interesting, we'll see (don't leave out the details).

Kind Regards

HopefulWishMoneyMaker

Primrose

I'd be very wary. Apart from anything else HM Customs and Revenue are now taking a very serious interest in everybody who is holding money offshore as they try and recoup millions of pounds of unpaid tax. I'm not suggesting that you are trying to do this but I think there would have to be a serious reason why it is more beneficial to hold money offshore than keeping it here and it will be interesting to see what reason your IFA is giving.

Debt-Free_2

dunstonh wrote: »

The offshore bond may not offer any protection in the form that the FSCS offers.

Hi

Recently l've invested in the Franklin Templeton Global Bond A Distribution GBP as it has no exposure to sterling, and adds some diversification to my portfolio. What I would like to know, has this fund is domiciled in Luxembourg. His it covered by any compensation scheme? From my own research it would appear that it could come under the umbrella of the EEA European Economic Area where you can claim up to 90% of 20000 euros in compensation.

Also do you know if Luxembourg have their own compensation scheme?

When I ask my own broker, he did not seem to know.

Best
William

dunstonh

it will be interesting to see what reason your IFA is giving.

probably gross roll up and the benefit of deferment. It is legally possible to avoid tax or reduce it by using offshore bonds and deferment. However, in the early years a chargeable event on an offshore bond can actually create more tax.

Primrose

Debt free - sorry I can't answer your questions, but I wouldn't recommend buying a financial product from a broker who can't answer some fairly fundanmental questions about the financial security or otherwise of your product. I presume he's been paid some commission for your investment. I'd be inclined to go back and ask him to find out the answer for you.