Friends Provident

charleset

My father has just recieved the final settlement figure for a 25 year savings policy that he has had with what is now Friends Provident originally it was UK provident.

This policy was sold on the basis that it would realise £23354.00

He has been offered £10039.00 of which he has contributed £6174.00 giving a 25 year return of 3.78% compound. All of this during a time when Friends Provident's net return quoted by them amounted to 250.42% posative after taking of 44% negative during the 25 year period and this is after meeting their management expences. ie they have returned 10% per annum on average and now offer 3.78%.

If this fund is unable to generate sufficient funds to return a sum near that quotrd during a period of expansion and good investment returns then this fund must be in a position that the future is going to be extremely poor.

We feel that you to investigate them and similar funds. We think that people paying into this type of investment in the future need to be warned that they are likely to recieve a poor payout and that sinking more money into current policies is a waste of time, there are better investments.

FoxtonsRIP

Is it with-profits? If so, I'm not suprised, they're total PANTS

Gwhiz

What's that saying... You Pays Your Money, You Takes Your Choice.

Investments can go down as well as up

mike_the_bike_2

I think a lot of folk are going to be very disappointed after following the "experts" advice to invest in "money purchase" pensions.

I have a 25 year Friends provident with profits endowment maturing soon and its appalling too..Never again!

sabretoothtigger

Sounds more like without profits

charleset

Yes but the point is during the 25 year period the fund is showing a net gain of 250% even after taking in last years 10% loss. They gave us the table of returns for each of the 25 years net, having taken off their management expences. We have calculated a table using these annual returns and deducted the tax and arrive at a figure in excess of 30k . so to expect a sum of around 23k as the product quoted on the original document which we still have is not unreasonable particularly in light of the growth the country has experience over the last twenty five years. If the company could not perform during this time then they must all be sitting on the next time bomb

dunstonh

I think a lot of folk are going to be very disappointed after following the "experts" advice to invest in "money purchase" pensions.

I dont think so. You cant measure 20-30-40 years of investing because of 2 years in 2008/9.

I have a 25 year Friends provident with profits endowment maturing soon and its appalling too..Never again!

It would be. The requirements put on the insurers 8 or 9 years ago regarding their WP funds means that they are now invested for financial security rather than rate of return. There are really only two viable with profit funds left.

mike_the_bike_2

dunstonh wrote: »

I dont think so. You cant measure 20-30-40 years of investing because of 2 years in 2008/9.

I wasn't talking about the last two years..I'm talking generally. I appreciate you are a financial consultant and may view these products different to me but I stand by my assertion that people retiring in the future will feel totally conned by these products by virtue of the fact that they will not provide them with the lifestyle/income that they believed they were going to get.It really will be a two horse situation ..those lucky enough to retire on a final salary scheme and the rest...



It would be. The requirements put on the insurers 8 or 9 years ago regarding their WP funds means that they are now invested for financial security rather than rate of return. There are really only two viable with profit funds left.

As a naieve child of the 80's endowment scams I can't argue with your point as I don't know the detail. What I would say though is that my experience then has helped shaped my views on life/insurance companies..

There is nothing of course to say that in the future say in 20 years time as a "grand elder" of the board when someone is asking why their pension returns are so appalling that your reply indicates that it would be because the rules were changed.........

dunstonh

There is nothing of course to say that in the future say in 20 years time as a "grand elder" of the board when someone is asking why their pension returns are so appalling that your reply indicates that it would be because the rules were changed.........

I think the rule changes have a lot more to do with it than you give it credit. 10-20 years ago with profits was the norm for the typical consumer. Unit linked funds were for the more experienced investor.

Unit linked funds give more control over risk, where you want to invest and you can switch around between different unit linked funds as you wish. Investment strategies are more common now than the old hit and hope approaches. Portfolio rebalancing is becoming mainstream.

A lot of the problem with legacy contracts is that they are obsolete but some people dont review them and leave it there. How many things do you still have from the 1980s that you use for important takes? yet when it comes to money, many people do.

As a naieve child of the 80's endowment scams

There was no scam. You have the benefit of hindsight. You can bet your life that if this site existed back in the 80s and 90s then Martin would have a section on which endowments to buy. Just as the consumers association (Which?) did. Hindsight is wonderful.

Stewster

dunstonh wrote: »

There are really only two viable with profit funds left.

And they are which ones ? Might be useful for people to know dunstonh. Thanks

dunstonh

Stewster wrote: »

And they are which ones ? Might be useful for people to know dunstonh. Thanks

Norwich Union and Pru.