Aviva portfolio bond

CAROLEC_3

Hi all,

Apologies first of all if my dilemma has been covered in other threads, however, here goes:-

My Aviva Portfolio Bond is qualifying for a no MVR guarantee at the moment and I'm unsure whether to cash it in or not.

I invested £20k in Sept 2000 and have taken 5% in monthly income since the outset.

The current valuation is £17129 which seems pretty good to me considering I have received £10k in income. There does not appear to be a final bonus attached.

I know this is not a huge amount of money to many who post on here but any thoughts/recommendations would be greatly appreciated.

Many thanks. :undecided

parcival

Many threads re With Profits Bonds. Most suggest that if you can get out without penalty then you should.

If you don't you could find an MVR being imposed that would make encashment very costly.

dunstonh

£20k in a bond isnt really effective nowadays. A couple can have that in an S&S ISA tax free or a single person over 2 years. No point using the bond wrapper unless there is a specific reason for doing so.

One way of looking at it is if you would use that product now for that money. The answer would nearly always be no. So, why keep the money in it?

missile

I calculate the return on your investment to be circa 3.1% AER. You could easily have bettered that in a savings account.

I recently cashed my £100,000 Aviva portfolio bond.

PS: I think you need to check your figures / annual statement. Regular withdrawals are paid on the anniversary and from Septmber 2000 you should have received 9 payments of £1000 i.e. £9,000 not £10,000. This would be equivalent to 2.71% AER. It is impossible to predict what your fund might be worth after the next £1000 withdrawal at the 10 year anniversary in September.

CAROLEC_3

missile wrote: »

I

PS: I think you need to check your figures / annual statement. Regular withdrawals are paid on the anniversary and from Septmber 2000 you should have received 9 payments of £1000 i.e. £9,000 not £10,000. This would be equivalent to 2.71% AER. It is impossible to predict what your fund might be worth after the next £1000 withdrawal at the 10 year anniversary in September.

Thanks for the reply. The withdrawals have been monthly not annually and started in September 2000, therefore, have amounted to £10k over the 10 years.

missile

My mistake, thanks for the clarification.

sabretoothtigger

The simple no risk answer to questions like this is to pay off your mortgage with it. That benefit is compounded over the rest of its term

The more complex answer would be to invest in something else. I personally wouldnt recommend holding plain sterling cash to this amount unless you have near term need for 20k spending


I thought emerging bonds were looking good past and present. Thats speculating on sterling and foreign currency worth as well though.
A stock index tracker might return annually not far off what you receive now and give growth of the capital also, long term that looks better to me

CAROLEC_3

sabretoothtigger wrote: »

The simple no risk answer to questions like this is to pay off your mortgage with it. That benefit is compounded over the rest of its term

The more complex answer would be to invest in something else. I personally wouldnt recommend holding plain sterling cash to this amount unless you have near term need for 20k spending


I thought emerging bonds were looking good past and present. Thats speculating on sterling and foreign currency worth as well though.
A stock index tracker might return annually not far off what you receive now and give growth of the capital also, long term that looks better to me

Thanks, for the reply.
I do not have a mortgage (finished last month:j) and do not envisage needing the cash any time in the near future.

Keefers48

I hope you have checked with Aviva that in fact, there is no MVR. I also have a Portfolio Bond which I have taken income from and I have been told by Aviva on the 10th anniversary that as I took income it does not qualify for the zero MVR. Nasty surprise which my IFA also didn't know about.

CAROLEC_3

Keefers48 wrote: »

I hope you have checked with Aviva that in fact, there is no MVR. I also have a Portfolio Bond which I have taken income from and I have been told by Aviva on the 10th anniversary that as I took income it does not qualify for the zero MVR. Nasty surprise which my IFA also didn't know about.

I cashed mine in today by telephone, definitely no MVR :j

missile

CAROLEC wrote: »

I cashed mine in today by telephone, definitely no MVR :j

I am pleased to hear it. May I ask have you decided where to invest/save the cash?