We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

John Lewis Bond

24

Comments

  • Rollinghome
    Rollinghome Posts: 2,739 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    The press release carried by the BBC has been duplicated on squillions of other websites so they could have a lot of confused savers thinking it's a simple fixed rate savings account.

    Slapped wrists in the JL press department.
  • 6022tivo
    6022tivo Posts: 818 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    I want in, but do not have a card, or a partner???????
  • missile
    missile Posts: 11,806 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Wish I had kept my John Lewis account open.
    "A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
    Ride hard or stay home :iloveyou:
  • purch
    purch Posts: 9,865 Forumite
    edited 6 March 2011 at 8:13PM
    However it has not made very clear that this is a corporate bond not a savings account. To get money back any investor would presumably need to sell on the stock market, potentially at a loss, before the redemption date

    As far as I can see this product is not a tradeable security.

    Basically it is a savings type product, offered by a retailer and not by a Bank.

    Probably a unique product, and because of that, hard to value.

    By comparison, Tesco Bank recently issued a Corporate Bond with a 5.2% Coupon until 2018. This paper is currently trading well above par (a profit to those who bought at issue), and is fully tradeable on the LSE Bond platform and settles via Crest.
    'In nature, there are neither rewards nor punishments - there are Consequences.'
  • planemad
    planemad Posts: 569 Forumite
    Part of the Furniture Combo Breaker
    edited 6 March 2011 at 8:35PM
    No Protection = Would not touch it with a barge pole.
    Larger firms have liquidated in the past overnight.

    You can get 4.9% from Aldermore on a fixed 5yr term, the extra interest does not suffice the zero protection afforded by the JL product.

    :D
  • wearside_2
    wearside_2 Posts: 1,508 Forumite
    Cashback Cashier
    My wife has a John Lewis Partnership Card (Credit Card to you and me) and is a non tax payer. Do we assume that interest can be paid gross or would the tax paid have to be reclaimed from HMRC?
    To Dare is To Do:beer:
  • premierfella
    premierfella Posts: 905 Forumite
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    Looking at the detail (from the view of a partnership card holder who doesn't shop at John Lewis/Waitrose regularly) its worth noting that the basic rate tax due on the gift voucher element is taken from the cash interest rather than by reducing the value of gift vouchers issued (although I guess the reason might be that this is a HMRC requirement). Not an issue for those who would be shopping to the value of the gift vouchers anyway.
  • D1zzy
    D1zzy Posts: 1,500 Forumite
    planemad wrote: »
    No Protection = Would not touch it with a barge pole.
    Larger firms have liquidated in the past overnight.

    You can get 4.9% from Aldermore on a fixed 5yr term, the extra interest does not suffice the zero protection afforded by the JL product.

    :D
    Or 5% from Close bros for 3 years!!
    http://www.closesavings.co.uk/premiumgold.asp
  • Mr_Mumble
    Mr_Mumble Posts: 1,758 Forumite
    The 6.5% is simple interest not compound. This is made clear on page 6 of the bond invitation document.

    John Lewis' example is £1,000 invested paying a gross £325 in cash interest and gift vouchers over the five years rather than the £370 you'd receive gross from a fixed savings account with £1000 kept from opening the account. The equivalent compound interest rate used in savings accounts for the JLP bond would be 5.71%.

    The use of simple interest is typical for corporate bond coupons but as with other aspects of the product will confuse anyone who thinks this is 'savings'. As is made clear on page 2 of the invitation document:

    "The John Lewis Partnership Bonds will be unconditional, unsecured, non-convertible and non-transferable obligations of John Lewis plc"

    Investors Chronicle has a list of corporate bonds for comparison (not a great comparison considering this bond is not transferable but it is a better comparison than a savings product).

    John Lewis currently has a corporate bond maturing 23rd January 2014 (2yr 10mo) with a yield of 3.85%. M&S has a bond maturing two months later that yields 3.84%.
    "The state is the great fiction by which everybody seeks to live at the expense of everybody else." -- Frederic Bastiat, 1848.
  • alanq
    alanq Posts: 4,216 Forumite
    1,000 Posts Combo Breaker
    planemad wrote: »
    You can get 4.9% from Aldermore on a fixed 5yr term, the extra interest does not suffice the zero protection afforded by the JL product.
    D1zzy wrote: »
    Or 5% from Close bros for 3 years!!
    http://www.closesavings.co.uk/premiumgold.asp

    £10,000 is the minimum that can be invested with Close Bros but the maximum that can be invested with JLP so there is not much of an overlap.

    Skipton BS are offering a 5-year (-ish) fixed rate ISA paying 5% which is accessible with loss of interest. Minimum £500.
    http://www.skipton.co.uk/savings_and_investments/isas/fixed_rate_cash_isa/
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 352.1K Banking & Borrowing
  • 253.5K Reduce Debt & Boost Income
  • 454.2K Spending & Discounts
  • 245.1K Work, Benefits & Business
  • 600.7K Mortgages, Homes & Bills
  • 177.5K Life & Family
  • 258.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.