Inurance Bond -- Good or Bad?????

dunstonh

I also made an oopsy. I forgot to deduct the 20% of the net gain for the bond, representing the HR tax! silly me. That takes the RIY required for OEICs up to 2.35%.

Just to clarify. Are you saying that the RIY on the Oeic has to be less than 2.35% to make it better than the bond at 1%?

Chrismaths

Over 20 years, and subject to the parameters laid out before - 6% capital growth, 2% income, higher rate taxpayer. I'll email you the spreadsheet if you like. PM me your email addy. The calculations are slightly limited as I've assumed that you won't be realising capital gains in excess of your exemption (which I think is fair given the £80k initial investment - and that you can use your ISA allowance). I've assumed that the capital gains in the bond are taxed at 20%, and the income outside the bond always taxed at 25% (effective) - which would over time in reality not be the case as the investments would end up in the ISA - and no additional income tax within the bond. I've assumed for simplicity that it is all equity. Easy enough to change that though.

The more returns are generated proportionally from income, the better the bond becomes, and vice versa.

Chrismaths

Just improved the spreadsheet to take into account ISAs - This means the RIY on the OEIC/ISAs needs to be 2.75% all other things being equal.

montycat_2

Hi ,
I just posted on here to explain That I had a NU bond and was quite happy with the service I received .
I don't want to go into details and in fact ,if you want to find out about the Portman deal ,go in and find out for yourself .
I'm sorry if I sound aggressive but ,I have made my decision ,am very happy with it and ,was just advising the OP that I personally am pleased with the product I got .
I didn't gain my money in a nice way and ,would rather not discuss it on that level .

Chrismaths

So basically you're posting to say "I like my bond - but I'm not telling you why, I just like it".

Thanks for that monty.:T

dunstonh

The Portman salesforce used to be tied to Norwich Union. So the product would have been a cut down version of the full retail product. It would also have had lesser terms than the full retail version to the person selling it. Meaning they had less to rebate, if they chose to. That version did allow a 7.5%p.a. withdrawal but that did not impact on the commission and the bond did not allow a "phased payment" of the commission to be taken. I wonder if the commission payment and the regular withdrawal are being mixed up here?

You cannot compare that NU bond to the current full retail version. Since Jan 2005, the Portman has operated on a multi-tied basis with Norwich Union acting as the key supplier.

payless

dunstonh wrote:

That version did allow a 7.5%p.a. withdrawal .

enough to fund a MIP ?:eek:

montycat_2

Chrismaths wrote:

So basically you're posting to say "I like my bond - but I'm not telling you why, I just like it".

Thanks for that monty.:T

Sorry ,but Are you genuinely thanking me for my post or ,being sarcastic .?

Is there something wrong with not wanting to tell how much I have invested ?

If I have misread you ,I apologise if not ,I am sorry I even posted in the first place .

Tiggs_2

ReportInvestor wrote:

I do love clarity from IFAs

I'd be tempted to stick to the "new model" like dh, and avoid the "old model".

Could dh confirm?

be carefull to not let the charging structure lead the way though, there are some excellent NMA's and some excellent "old" style advisers. In a like for like you would take the NMA.....but in the real world you may well find yourself faced with a choice between an excellent, local, professional adviser who you get on well with and can create a long term relationship with you (being very positive for your long term finances).....who works on the old basis or trying to find a new adviser whos cheaper.

now whether you want to give up the first to go hunt down the second depends on lots of other factors...is the advice you require complex, do you NEED the local bloke or can any IFA do what you need, etc, etc.

Obv this is a money saving forum so the default choice is to go to whatever ends needed to find the cheapest....but for those who already have advisers...dont jump to dump them based on that one issue.

perhaps stating the obvious!

payless

montycat wrote:

Sorry ,but Are you genuinely thanking me for my post or ,being sarcastic .?

Is there something wrong with not wanting to tell how much I have invested ?

If I have misread you ,I apologise if not ,I am sorry I even posted in the first place .

but you did .. state £78K... its the actual break up of what commission they rebated ( again you stated this) I was interested in