Clerical Medical with profits bond

EdInvestor

derrick wrote:

Have just made the call and they tell me because it is a with profits bond and the start falls between certain dates it has not got an accumalitive value.

Suggest you try again and get this in writing, the response does not compute.You should have been able to withdraw 7.5% (this money is from the original capital invested) each and every year since you originally invested without any MVA being imposed. You can usually allow these annual amounts to mount up and then take them all at once, so that 7 x £1182 = £8274 should be available to withdraw now.

derrick

EdInvestor wrote:

Suggest you try again and get this in writing, the response does not compute.You should have been able to withdraw 7.5% (this money is from the original capital invested) each and every year since you originally invested without any MVA being imposed. You can usually allow these annual amounts to mount up and then take them all at once, so that 7 x £1182 = £8274 should be available to withdraw now.

Thanks I will try in writing.

derrick

EdInvestor wrote:

Suggest you try again and get this in writing, the response does not compute.You should have been able to withdraw 7.5% (this money is from the original capital invested) each and every year since you originally invested without any MVA being imposed. You can usually allow these annual amounts to mount up and then take them all at once, so that 7 x £1182 = £8274 should be available to withdraw now.

I have now received a reply from CM, but without any explanation as such:-

Thank you for your letter dated 8 July 2006.
I confirm that the maximum regular withdrawal permitted for this policy is 7.5% of your
original investment amount of £15000.00, per policy year. This would therefore equate to
£1125.00 per policy year and withdrawals within this limit are currently not subject to a
Market Value Adjustment (MVA).
However, this MVA free allowance is strictly per policy year and any unused allowance from
previous years cannot be accumulated. Therefore the maximum you can take in the current
policy year (which runs from 16 June 2006 to 15 June 2007) without incurring an MVA is
£1125.00. Any withdrawal above this amount would be subject to an MVA at the current rate
of 6%


Please note that your policy has an optional encashment date of 16 June 2009. This is the one
date that you can opt to encash all or part of your bond and we can guarantee that an MVA
will not apply (provided you confirm in writing at least 30 days, but not more than three
months, before the optional encashment date that you wish to proceed with the encashment).

Any other thoughts as to how I can get at the money without the MVA?

My only other option seems to be to withdraw the fund value,£19429, take the hit of about £1100,(6% MVA on £18304,after the MVA free reg withdrawal of £1125), and put the money,(£18329) in a b/s because the last 2 years have only increased the fund value by £48 in 2005,and £150 in 2006,
therefore I might only receive another £450, if the fund increases by £150 each year for the next 3 years,(up to the "optional encashment date of 16 June 2009.)"
But by putting it in a B/S at say 4.% I would receive £733 per year, £2199 over the 3 years, a gain over those 3 years of £1099. as against leaving it in the fund.

EdInvestor

CM usually announce half year bonus rates and MVR changes in August so any decision should not take place until then. It's quite possible you will see the MVR drop.

Suggest you wait for this and then go.

derrick

EdInvestor wrote:

I would agree, go now: net return will be around 2.3% a year. Could have been worse, considering the period includes the worst stockmarket crash for a generation.

Thought so, where is the 2.3% net from? 4% gross is 3.2% net at 20% savings tax.

derrick

EdInvestor wrote:

Suggest you wait for this and then go.

They have just dropped it from 7% to 6% on 1st August, they told me last time I phoned,(6th July), them that they are assessing it 3 times a year at the moment.

EdInvestor

Sorry derrick, see my amended post.

derrick

EdInvestor wrote:

Sorry derrick, see my amended post.

Yes saw it after I had posted, but did you just get the 3 & 2 the wrong way round?