Aviva with profits bond

lucy41

Can anyone advise me please? My mother has a with profits bond with Aviva, which up until now has given here a nice little extra income of approx £150 per month. It has now dropped to £50 per month!! She feels that her money might be better elsewhere but it is a 5 year bond opened in may 2007. She stands to lose quite a lot of money in penalties if she takes it out early, but seems to think if she reinvests it elsewhere it could possibly earn her more in the long run. I'm not so sure what her best course of action should be. The original investment was for £30,000 to date she has earned £3,856.03, but the cash in value at the moment is £26,458.36. I'd be greatful for any help on what to do for the best.

Thanks

dunstonh

Can anyone advise me please?

not on the board, no. The board is not authorised to give advice on regulated matters. Just comment and discussion.

My mother has a with profits bond with Aviva, which up until now has given here a nice little extra income of approx £150 per month. It has now dropped to £50 per month!!

Is this because she is taking natural income (i.e. with profit income fund) or because she is taking a fixed regular withdrawal and has reduced the amount (the standard with profit fund or any of the others)?

She stands to lose quite a lot of money in penalties if she takes it out early, but seems to think if she reinvests it elsewhere it could possibly earn her more in the long run.

Fair enough. Aviva portfolio bonds have around 150 funds available and you can switch between them free of charge unless there is a market value reduction being applied to her fund at the moment.

The original investment was for £30,000 to date she has earned £3,856.03, but the cash in value at the moment is £26,458.36. I'd be greatful for any help on what to do for the best.

£30k in an investment bond? That doesn't sound right. Investment bonds are typically best for larger investments (around the 70k-100k plus mark) and that is after you have used your ISA allowance in full. If she is over 65 and close to earning £22,900 a year then that could be a good reason for a bond or if she is currently a higher rate taxpayer. However, if she is neither of those then it doesnt look like good advice. This is the sort of thing you see often with the banks, did she buy from a bank? Did she use her ISA allowance in the year of purchase? if not, then its possible she can put in a complaint for mis-sale for an inappropriate product and get it voided (allowing her to exit without penalty).