Tax exempt savings plan

punjabipal

Don't know if anyone can give me some advice please.
I took out a tax exempt savings plan 10 years ago. I paid £15 a month.
I knew that the policy was dependant on the stock market doing well and
I was given a letter showing me if my money grew by 6%, 8%, 10% how much I would receive. It also stated that the markets can go down as well.
Each year I received my statement and watched my money grow.
After 9 years I had nearly £1900 and with only 1 year to go, I was looking at a tidy profit.
However, in January this year, I received my statement and found that although I had paid another £180 in monthly instalments last year, my amount due had dropped to £1400.
My policy finishes April this year and I have just received another letter, saying that my final total has dropped to £1200 and may go lower by the maturity date April 1st.
This means it has taken me nearly 9 years to make nearly 10% and 1 year to lose nearly 50%,
Surely this can't be right ! ! ! !
I phoned the company-Engage assurance - and was assured it was right.

I only took the policy out because they said it was a TAX EXEMPT SAVINGS PLAN and I thought it sounded very good.

I was never told at anytime,that I would lose so much of the money I invested.
I would have been better off if I had put my money into a building society or even premium bonds.
I have wrote a letter of complaint to Engage but can't see them paying a larger amount.
Anyone help or am I at fault

Reaper

So you took out a policy which you knew was invested in the stock market. Now the stock market has crashed and you are surpised the value of your policy has too?

Making a loss is no grounds for a complaint.

redmandarin

Very well put, Reaper!

malik999

>Anyone help or am I at fault

Neither of you is at fault. Turn on the news we are all in the same boat.
From your figures you feel you are down about £700 at the moment. I was losing about £700 an hour last week on share prices so count yourself lucky

dunstonh

I was never told at anytime,that I would lose so much of the money I invested.

Did you buy through an IFA or did you buy direct?

I knew that the policy was dependant on the stock market doing well

Regardless of how you bought, you knew this so no complaint.

Surely this can't be right ! ! ! !

The FTSE100 has fallen nearly 50% over the last couple of years. Why do you think you should be exempt from that when you knew the plan you chose to buy was linked to the stockmarket?

punjabipal

Thanx for all the replies. I think I have learnt my lesson, but when it said 'TAX FREE and a SAVINGS PLAN, I presumed I had more to gain than lose.
I will stick to the building society/premium bonds in future.

bendix

Sometimes, no matter how hard you try, you just can't save people from themselves.

doire_2

punjabipal wrote: »

Thanx for all the replies. I think I have learnt my lesson, but when it said 'TAX FREE and a SAVINGS PLAN, I presumed I had more to gain than lose.
I will stick to the building society/premium bonds in future.

Why not use a CASH ISA - tax free and no risk

gozomark

punjabipal wrote: »

Thanx for all the replies. I think I have learnt my lesson, but when it said 'TAX FREE and a SAVINGS PLAN, I presumed I had more to gain than lose.
.

you did - the most you could lose was 100%, but the upside was unlimited

dunstonh

Regular "saving" plans dont tend to work well unless you look at longer terms. 15 years or so. 10 years leaves you at risk of suffering a potential loss.

Someone posted not too long back, with figures, saying that there were only a small number of 10 year periods that say losses with the vast majority beating cash. Unfortunately, the last 10 years was one of those minority periods. It shouldnt put you off in future but it does highlight the risks of invest and forget and putting all your eggs in one basket.

gozomark

yep, the problem with a 10 year monthly plan is that the average payment is only invested for 5 years, not long enough for equity investing