With-Profits Bonds investments

Geoffo_M

In August 2000, I made investments in with-profits bonds with CGU (now Norwich U), Clerical Medical and Scottish Widows. Not only have the returns been pitiful, there is still an MVR (last August statement had 10/15%).

I can get my money back on the 10th anniversary and there will be no MVR then. It is my pride which is making me hang on, but I wonder if I am doing the right thing.

It's another 4+ years to wait. I'm not desperate for the cash but wonder if I am being stupid?

Geoff

dunstonh

Your timing was poor but that always happens with equity backed investments from time to time. NU have a very good with profits fund and still support it. Indeed, for new business the NU unitised with profits has been growing in excess of 10% p.a. for the last 3 years. So, that could come round for you nicely yet. CM and SW are not as strong and I would certainly look at those two.

One option, in particular with the NU bond is that it allows 7.5% p.a. to be withdrawn or switched funds without MVR or penalty. NU have a very good range of unit linked funds and you could switch 7.5% of the investment each year into alternative funds and progressively move them over. This could be possible with CM and SW as well but you would need to verify that annual withdrawal allowance also applies to fund switches. If not, just withdraw the money allowed without penalty each year and ISA it

Slim

You need to check the latest position on MVRs. I'm sure that for Scottish Widows this is now nil%.

Geoffo_M

Thanks dunstonh - I shall study each of your suggestions and likely follow them.

Slim - hope you are right about SW

Thanks

Geoff

:beer:

ManAtHome

Depends why you invested and what your tax status is and will be. I have some taken around the same time as you as it was quite likely I'd be a higher-rate taxpayer until a year or two before maturity (or at least "extractable without penalty" time..). Returns have been 1 or 2% better than savings accounts so far - not that bothered about MVAs as they were intentionally medium-term investments.

(Un)fortunately GB(H) then invented A-Day, but that's another story...