Flexible Investment Plan

dunstonh

The FIP was taken out in 1991. ISAs were not available at the time. PEPs were introduced in 1987 with most regular savings PEPs not becoming mainstream until around the mid 1990s. Most had £100pm minimums.

This plan was correct for the year it was taken out. An ISA could not have been taken and regular savings PEPs were not widespread at that time and those that were couldnt do £50pm.

This was unlikely to be a commission based sale as at that time, this was the typical way to save in investments.

EdInvestor

This was the typical way to save in investments.

Tut,tut DH, and there I was thinking how very encouraging it was that you so often post on this forum correcting people when they say they want to "invest" ( take a risk with) their money, when they really mean "save" it (put it away safely where it can earn interest).

The OP seems to be a victim of this confusion over risk, as are most mis-sold endowment policyholders

EdInvestor

This thread seems to be on an almost identical product.

defender_of_the_weak

Dunston a typo nothing more, I am well aware of the dates of introduction for product classes. OP changed date to 1995

Nobody doing a £50 regular PEP in 1995, you're having a laugh. Some of them were set as low as £30 in 1987 (I was there) and £50 was common by 1995.

£18 initial annual commission versus £240 plus and annual renewal of £15. Not a commission sale!!!!

Regular premium unit trust policies on which the above PEPs were based were also available but not recommended.

The prevalence of this type of recommendation does not make it suitable it merely demonstartes the widespread nature of the negligence in advice (some judges words, not mine)

ReportInvestor

dunstonh wrote:

Its very easy to look back in hindsight and apply todays standards to things 10 years ago but you have to remember that we were still a boom/bust and higher inflation economy back then with charges and terms to reflect that.

Why should charges have been so much higher?

You seem to be suggesting that charges bore no relation to costs. Thank you for the confirmation, if I have read you correctly.

Was this just because the industry thought it could get away with it? I can't think of any other reason.

dunstonh

Why should charges have been so much higher?

Because they were. Both commissions and administration costs were higher reflecting in higher charges. These were usually masked by implicit charging structures and higher growth (not in real terms). It shouldnt be blamed on commissions only. Back then, the insurance companies were less cost aware than today. You could say that about many companies across many industries.

kez_s

I am aware that this is a very old post but it's the only thing I could find that was close to what my dh has and we are trying to see what the best thing is for us to do.

My dh took out what he was told was an endowment policy with M&G almost 12 years ago and he pays £43 pm into this. As times our tight and we've been looking at our monthly outgoings we have delved deeper into this but I am still not sure what we have though it does not seem to be a endowment and I think it's FIP which is now with Prudential. Looking at the info we have "investment linked clusters" which only seems to what Prudential refers to as a single premium bond.

We have been given the following values:

Surrender value £6440.51
Value on death £8694.00

Poss Maturity Benefit £16500 4%
£20200 6%
£24900 8%

Based on it ending June 2023

Is this something that can only be surrendered or could we sell it on? The surrender value alone means we can pay off some debts, etc., and have a bit of fun with the rest but obviously if we can get more for it then we'd be crazy not to.

We don't really know much about it and have just paid £43pm and forgot about it, though the projected values are nothing like the figures my dh was told he would get - but at the time he was only a young lad of 18 and didn't really have a clue what he was doing.