PEP suitable for an elderly lady?

dunstonh

Oldbiggles wrote: »

What exactly is a 'Capital guarantee on death' and how does it work?

If you die, the value of the investment is paid out or the original investment amount (minus withdrawals) whichever is higher.

This allows people who want to continue investing but getting on in life to do so without fear of death occurring at a "bad time"

For many people in retirement, the death guarantee is all they need. Not a full guarantee.

margaretclare

What's a PIP?

And what do you mean by the following: 'This allows people who want to continue investing but getting on in life to do so without fear of death occurring at a "bad time" '?

What's 'death occurring at a bad time'? Is there ever a 'good time'?

I agree, I'm what you might call 'gettingonabit' I suppose, and I haven't got £100K to play around with, but I wouldn't put that amount - or any amount - into something I didn't understand. Still less would I buy any bank's investment products.

dunstonh

What's a PIP?

Its an internal marketing name rather than a product type. Halifax have called their investment bonds personal investment plans. Its only applicable to them and is not a generic term. So, think investment bond.

and what do you mean by the following: 'This allows people who want to continue investing but getting on in life to do so without fear of death occurring at a "bad time" '?
What's 'death occurring at a bad time'? Is there ever a 'good time'?

There is never a good time for death which is why I emphasised it. However, death occurring after a market crash doesnt allow for the investments to recover. If the intention was for a beneficiary to get the money for a purpose (such as income provision for a spouse) then the death guarantee can be helpful as it makes sure the beneficiary gets a minimum amount, irrespective of investment returns.

I agree, I'm what you might call 'gettingonabit' I suppose, and I haven't got £100K to play around with, but I wouldn't put that amount - or any amount - into something I didn't understand. Still less would I buy any bank's investment products.

Bank sales reps retail low quality products to low knowledge consumers and have sales targets for doing so. Many of the sales reps are trainees or low skilled as they have become the training ground. Also, many banks have authorised normal staff to do these transactions who have no aspiration to be advisers. So, in that environment it is no surprise that the banks, despite setting up a minority of transactions (around 15% I last read) have over half the complaints.

cepheus

My Mother was sold the same product some years ago in her late seventies. I was furious with the Halifax at the time. However it did prove useful, since a PIP isn't supposed to be taken into account in the means test for Pension Credit (or nursing home charges for that matter). Although the local authority attempted to include it, after a hard fought battle I conviced them to exclude it. This led to a substantial increase in her standard of living, including free rent and no council tax.

If your Mothers other savings are below around 30k, lives in a council property and she only has the state pension to rely on, this product might be worth it although you may have to go through the same fight as I did.

You should also find out what date the PIP starts, and examine the stockmarket just before the 30 days are up before arriving at a decision!

Oldbiggles

margaretclare wrote: »

What's a PIP?

And what do you mean by the following: 'This allows people who want to continue investing but getting on in life to do so without fear of death occurring at a "bad time" '?

What's 'death occurring at a bad time'? Is there ever a 'good time'?

I agree, I'm what you might call 'gettingonabit' I suppose, and I haven't got £100K to play around with, but I wouldn't put that amount - or any amount - into something I didn't understand. Still less would I buy any bank's investment products.

Couldn't agree with you more about Banks. These "friendly" bank managers are only interested in making money to cover their massive debts.

Jake'sGran

Annisele wrote: »

I don't have a problem in principle with investment products being sold to elderly people. (Do you fancy telling Warren Buffett - age 79 - that he shouldn't be investing )

However, I do have a problem with people being sold things that they don't understand. It's also pretty rare for banks to have the best products.

If she does cancel then she might lose some money, if the underlying investments have fallen since she first investment. However - it still might be worth cancelling it, and then asking an IFA for an opinion.

The salesman will have known that this lady did not really understand what he was selling to her. I have never bought an investment from a
bank. You cannot compare a lady like this with Warren Buffet. He will probably be a wise investor when he is 90 should he live that long.

This investment should be cancelled now and if the value has dropped the bank should make up the difference under the circumstances. A fixed rate bond would be much more suitable, say 3-5 years at the best rate you can find for her.