Phoenix cancels terminal bonuses

EdInvestor

On all policies under 25 years old.

http://www.telegraph.co.uk/finance/personalfinance/investing/5964414/With-profits-cancelled-terminal-bonuses-heap-woe-on-policyholders.html

dunstonh

Not much of a surprise

Pearl group was based on borrowing money and buying dead insurers. They had problems renogotiating their debts recently and as most With Profits funds are not ringfenced from the asset of the company, dropping the bonus was a logical outcome.

These zombie funds have been useless for years but even more so now. Unless there is some contractual reason to stay (massive exit charge that wont be able to be recovered by alternative of guarantees in place) then you should really be considering your options.

EdInvestor

Soime Phoenix policies have quite high guaranteed values, hard to match at a time of low interest rates.These policies can be worth keeping to maturity.

dunstonh

EdInvestor wrote: »

Soime Phoenix policies have quite high guaranteed values, hard to match at a time of low interest rates.These policies can be worth keeping to maturity.

Yes. Hence why I mentioned contractual reasons.

There are also a number of Phoenix unit linked plans. They shouldnt be confused with these.

LeafyBarnet

We are currently not paying a terminal bonus on terms of 25 years or less on policies similar to PALAL policies.

Odd then that my 25-yr old Scottish Prov with-profits endowment policy will mature next month with £850 TB. Not enough to merit throwing a hat in the air, but still better than 0%.

Overall the policy has given a return of 4.8% tax free.

EdInvestor

Will the £850 still be there in a month, one wonders?

LeafyBarnet

My maturity letter from Phoenix is dated in the last week of July; elsewhere they advise that they "usually" set TBs in Jan and July. I guess they could reset TBs at any time though.