Investment Plan dilemma

andrewbrittain

Hi

I have a big bank loan of £14,000 - over £16,000 including the interest. I need to pay it off ASAP and am working out a plan for doing so. I have some savings in an ISA, am selling some assets etc...

My partner has an Axa Sun Life 'Bonus Cashbuilder Plus' with-profits investment plan, where she pays in £60 per month for 15 years, to get a guaranteed return when it matures. It's invested in the stockmarket so that return is linked to shares performance.

She's paid in about £2,500 so far - money which would be very useful to pay off our loan (we're well aware of the need to pay off loans before doing any savings). Trouble is, Axa will charge her over £800 redemption penalty if we cash it in now. Her circumstances have changed since she signed up for the 15-years and we need the money. But at what cost! Plus that £60 per month would be very useful in a high-interest savings account to help towards additional payments on the loan. £60 that we're committed to paying for the next decade or so...

Should we axe it, write off the £800 as a lesson learned, use the £1,800 and the extra £60 per month towards paying off the loan. Or should we hold on and wait the full 15-years and just take longer to pay off our loan?

Any advice anyone????

Midas

You may be able to stop contributing to the plan without cancelling it (so avoiding the £800 hit). This would free up the £60 pm to pay-off debt. It would mean that you'd need to wait until the plans maturity date to get the rest of the money. You'd need to speak to Axa to see if this option is available to you.

If you do decide to get rid of the plan completely, you might be able to get a better return by selling it rather than cancelling it.

dunstonh

Take a read of the AXA threads in this section over the last year. You may be able to get the whole plan refunded without cost to you.

andrewbrittain

Thanks dunstonh. I've spent a good few hours trawling through hundreds of other posts about this plan. I never realised it was so bad, so that's the decision made about getting out of it now.

I see there are a couple of people who, despite not starting the plan during the period where they're eligible to get their money back, managed to get full refunds anyway, by writing a letter of complaint. But I'm not quite clear as to what I should base such a letter on? It seems you'd probably know... Are you able to give me an idea as to what my complaint letter should say? i.e., on what grounds should I argue for a full refund?

Thanks again