I came across this product (7% p.a.)

Matty0682

I came across this product – basically it’s a tax free with products policy paying 7% p.a tax free compound for 10 years. Put in £270 a year and you will get back £4k minimum. It could be more but the minimum amount that you will receive back is £4k.

Normally I would steer of these types of investments but I think the guarantee is worth a flutter. The max you can put in is £270 p.a (or £25 a month)- you still get the same minimum return either way so I would recommend the annual option so it wont make your fortune but good if you have a baby wanting a new car in 17 years time....and it’a tax free

I’ve checked out the friendly society and it is regulated by the FSA so nothing dodgy going on.

http://www.druidsfriendly.com/products/adult_kids.htm

What does eveyone think?
thanks

Lokolo

It's not 7% though, its 4%. Not sure how you got to 7%. It even says on the webpage 4%.

Stompa

It seems to work out at 5.8%pa net, so for a 20% taxpayer that'll be 7.25%pa gross.

Lokolo

Stompa wrote: »

It seems to work out at 5.8%pa net, so for a 20% taxpayer that'll be 7.25%pa gross.

Ah, the 'regular' saver rate, of course.

Matty0682

Stompa wrote: »

It seems to work out at 5.8%pa net, so for a 20% taxpayer that'll be 7.25%pa gross.

Hope I didn't sound misleading....I thought i'd quote the gross as everyone is on different tax bands

Stompa

It's pretty poor if you should need to cash in early though.

boomerangs

Matty0682 wrote: »

I came across this product – basically it’s a tax free with products policy paying 7% p.a tax free compound for 10 years. Put in £270 a year and you will get back £4k minimum. It could be more but the minimum amount that you will receive back is £4k.

Normally I would steer of these types of investments but I think the guarantee is worth a flutter. The max you can put in is £270 p.a (or £25 a month)- you still get the same minimum return either way so I would recommend the annual option so it wont make your fortune but good if you have a baby wanting a new car in 17 years time....and it’a tax free

I’ve checked out the friendly society and it is regulated by the FSA so nothing dodgy going on.

http://www.druidsfriendly.com/products/adult_kids.htm

What does eveyone think?
thanks

It's one of the notorious tax-free savings plan therefore total rubbish. The charges are horrendous with these plans.

dunstonh

The 7% is the mid rate FSA illustration figure shown on tax free investments. Coupled with that would be the message that you could get back more or less than that and that its not guaranteed.

The guaranteed bonus rate is gross of charges and these plans are not cheap.

What does eveyone think?

Obsolete, expensive and the tax free bit is a red herring as an amount of that size is not going to be taxable for most people anyway.

clairbear_3

I always feel uneasy when I see Endowment and Guaranteed in the same sentence .
Also it states How much does the advice cost/a commission of 30% of first years premiums(which would be 1k on max premiums)

dunstonh

Also it states How much does the advice cost/a commission of 30% of first years premiums(which would be 1k on max premiums)

Which is great when you consider that there isnt any advice. They are pocketing that for themselves for doing diddley sqaut.

jamesd

I think it's a pretty poor product when the FTSE index is expected to pay around 4% in dividends each year plus any growth you can get from it or a range of other investments. Have a look at this DIY GEB description for an option with protection but more upside than this. That's for lump sums but you can modify it to use a mixture of savings accounts and investments.