How to Ditch your Crap With-Profit Bonds without Penalty

2010

http://www.timesonline.co.uk/tol/money/investment/article7069539.ece

About 300,000 people will get the chance to ditch poorly performing with-profits bonds without penalty this year, using 10-year “get-out-of-jail-free” anniversaries.

daveoc22

I'm with Aviva and my 10 years is up some time in Summer 2011.

I intend to take advantage of the penalty free cash in.

Has anyone experience of this---when do you write in, do you send it recorded, must it arrive on/by a certain date, can you send it in advance,do you phone first?.

Thanks

Old_Slaphead

daveoc22 wrote: »

I'm with Aviva and my 10 years is up some time in Summer 2011.

I intend to take advantage of the penalty free cash in.

Has anyone experience of this---when do you write in, do you send it recorded, must it arrive on/by a certain date, can you send it in advance,do you phone first?.

Thanks

They normally write to you about 3 months before 10 year anniversary.

You have 2 months (1 month before to 1 month after) to request closure of policy. You don't need their letter to request repayment so long as you know the date of the policy and you reply within the stipulated period.

For those who don't wish to encash - there is an MVR carry forward option (it's a bit complicated so it's best to ask Aviva for details).

Personally I shall be getting out. The policy has not matched my expectations over the decade.

dunstonh

I have had several recently hit their 5 year point and we decided on all of them to stay put. They were achieving what was required of them and the returns were in line with what was going on with economic events. That said, we did move some into the unit linked fund range to diversify more (which you can do with many of the Aviva ones).

2010

daveoc22 wrote: »

I'm with Aviva and my 10 years is up some time in Summer 2011.

I intend to take advantage of the penalty free cash in.

Has anyone experience of this---when do you write in, do you send it recorded, must it arrive on/by a certain date, can you send it in advance,do you phone first?.

Thanks

There is a link in the Times article that takes you to a company called "exit with profit".
I didn`t want to post a link because obviously this company is in it to charge a fat fee for something that you can basically do yourself.
Although if you do go to their site there is some useful info that you may glean.

My 10 years is up in August and I will be getting out while there is no exit penalty because the chance may not arise again for a very long time.

You can safely ignore what Dunstonh has said because a 5 year doesn`t have a get out clause and he has a vested interest to pretend these types of products are the best thing since sliced bread,when actually everybody knows they`re not.

I will be contacting Aviva about 2/3 months before the tenth anniversary and requesting my policy be cashed in on that date.

Well it looks like at least 3 of us are getting out while we can which kind of speaks volumes.

parcival

I agree with you 2010 - in general With Profits are a joke.

We have 3 policies sold to us by our former IFA. They are all nearly 9 years old. The Aviva is just about ok but only because of the 3 special bonuses that have been added plus the reattribution payout. These 'extras' were not envisaged by the IFA at time of sale. The Aviva policy has never offered a final bonus but has had an MVR for much of it's life. Needless to say it will be history on the 10 year anniversary.

The second policy is with Prudential who are the only company who have played fair in terms of final bonus and MVR. We may keep this one for a good while.

The third is with Standard Life...... just don't get me started on that...

dunstonh

You can safely ignore what Dunstonh has said because a 5 year doesn`t have a get out clause and he has a vested interest to pretend these types of products are the best thing since sliced bread,when actually everybody knows they`re not.

The Aviva ones for many years have had a 5 year MVR exit free point. If you dont excercise that you get another one at 10 years.

I also have no vested interest in keeping the policies there. Personally, i prefer unit linked. However, I think that where its doing the job and doing it well then its fine for the person. It's very hard to tell an Aviva with profits bond holder that is paying out 5% a year net and has grown by 12% over the 5 years on top of that income that the product they have got could be better but they would have to accept more volatility. Some WP funds are rubbish. Others average, a small number can still do the job. You are assuming they are all bad when that is clearly a biased opinion. I prefer to stick to an unbiased opinion.

Please dont post rubbish about vested interest when you don't know what you are talking about.

Geoffo_M

Aviva policies bought in year 2000 have the highest MVR at 18%. Anyone whose 10 year anniversary is this year would do well to get out. Next year's MVR is currently listed at 10%

Old_Slaphead

10 years ago, when the FTSE was north of 6000, WP bonds were being pushed to high heaven as a safe and boring investment.

With the property and stockmarket crashes they turned out to be anything but.....to the great misfortune of widows, orphans and suckers.

Lack of transparency led many such funds to be used as a milsch cow for all other insurco needs (ie to pay for misselling, top up employee pension funds etc)

Hindsight is a great thing however most of the literature (and I've still got copies of the booklet) gave negligible prominence to imposition of MVAs (in fact, most claimed they were rarely if ever used - which is probably true up until then).

On the upside, it's taught me to be very careful now as to what I buy, what charges I pay and what I consider to be good, impartial advice.

Old_Slaphead

Geoffo_M wrote: »

Aviva policies bought in year 2000 have the highest MVR at 18%. Anyone whose 10 year anniversary is this year would do well to get out. Next year's MVR is currently listed at 10%

I was told that the MVAs where last calculated when stockmarket level was around 4800. Presumably they'll be reduced fairly soon ???

parcival

Smoothing.......................

Seems like they smooth out the good years so we don't get the benefit but still hammer us in the poor years.

Oh well, musn't grumble.