Scottish Friendly Bond

balld

Hi. I've got a Scottish Friendly 10 year bond that is due to mature next year. The surrender value at the moment is just over £3000 and the sum assured is £2800. By cashing in now I'll lose any further bonuses and potentially a terminal bonus. I could do with the money now. Am I likely to make much more on it over the next year? Thanks for your help

Reaper

Without knowing much about the particluar product (but it sounds like a 10 year with profits friendly society policy which aren't well thought of on this board) as a general rule cashing in a 10 year policy just before it matures is not usually a good idea.

While I can't predict what the terminal bonus will be here is a post from somebody a few months ago saying what it paid out then.
http://forums.moneysavingexpert.com/showpost.php?p=35935271&postcount=28

Loughton_Monkey

Any such 10 year 'bond' tends to be technically a Life Assurance policy. As such, early surrender comes with a significant penalty on what is (usually) a very poor underlying return anyway. So it's best to let them run the term if you are 8 years into it.

Cashing it in early after less than 10 years also makes any profit a 'chargeable gain' for Capital Gains Tax. This alone, though, would not represent a problem on the assumption that you will not be receiving more than about £10,000 Capital Gains in the same tax year.