they rob us blind

letsbehonest

An elderly friend has a with profits bond (£5k) with Nat West, It has run it's 5 year course so she went to her bank to cash it in and collect her megre returns, "you can cash it in but you will be fined £500 she was informed!!!, I volunteered to sort out an explaination, This is the upshot of it all, although she has left the money in the bond for the agreed amount of time a "market value reduction charge will be made, in other words this amounts to a fine . This is designed to stop investors getting their money back and draining the bank of it's funds. This NVR as it's called will be reduced in the future, but when who knows? You can have YOUR money back but we will nick a fair old lump of it coz we are in trouble,,,,,,,,,,,,,,, yer right you robbing b

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eranou

Youd be better posting in the savings and investment forum for more advice the fact you call it an "NVR" says to me you dont have the full information of what this is.

starrystarry

As eranou said, I don't think you really understand the product. A With Profit Bond usually won't have a "5 year course". Technically they are single premium whole of life policies, which means they have no term. There might be a window at 5 years, at which you can withdraw your money, but that doesn't mean it has run its course. The market value reductions are there to protect the remaining policyholders who have monies in that fund. If a lot of people withdraw their money then the fund has less to invest and will therefore make less of a return. If your friend had read all the documentation properly and made sure he/she understood the product, then this miight not have been so much of a shock. If he/she chose not to read/understand, that doesn't make it Nat West's fault.

cally6008

I think the word to take note of is ... elderly ...

starrystarry

cally6008 wrote: »

I think the word to take note of is ... elderly ...

Meaning what? Are we to assume that all elderly people are incapable of understanding a contract?

cally6008

Not at all, just meaning that an elderly person might not be as wise to the financial world and jargon speak as some of the younger generations may be

starrystarry

cally6008 wrote: »

Not at all, just meaning that an elderly person might not be as wise to the financial world and jargon speak as some of the younger generations may be

Quite true. Doesn't make it Nat West's fault though does it?

cally6008

I never said it was Nat West's fault

starrystarry

cally6008 wrote: »

I never said it was Nat West's fault

Ok, I must have misunderstood you. It sounded like you were agreeing with the OP.

I do have some sympathy for the elderly person involved, but the OP's suggestion that Nat West were robbing them blind is clearly ridiculous.

letsbehonest

As the original OP. I Made a Typo it should read MVR, I'm sure those who understand these things new that !, and thanks for the information starrystarry I do not fully understand this product, but it does say in the policy document that the withdrawal charge will be 1% upon 5 years thats not £500 on £5k is it. as I said before Robbing B

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starrystarry

Unfortunately the policy document will also say that Nat West are entitled to apply an MVR, which is completely separate from the withdrawal charge. It's a shame that your friend didn't get any advice before he/she bought the bond. Any IFA would have advised him/her that they are a medium to long term investment. There are far more appropriate investment products if you're only planning to keep it for 5 years.

On a more positive note, it really is possible that Nat West may reduce the MVR in the future. They have generally been coming down for a while now.