Railway Engineman Assurance - saving plan - Advice please

jonnyb1978

http://www.enginemens.co.uk/sites/default/files/uploads/RAIL-APP-FORM-SAVER.pdf

http://www.enginemens.co.uk/sites/default/files/uploads/RAIL-APP-FORM-CHILD.pdf

http://www.enginemens.co.uk/sites/default/files/uploads/RAIL-APP-FORM-DISABILITY.pdf


I doubt many have heard of this but its especially for rail workers who are track safety qualified.

The basis is you invest a certain amount per week for a set period (10,15,20 years etc). They give you a minimum figure you recieve back when it matures after 10 years for example plus any growth and bonuses through the investments. The money you recieve back is tax free and the first £5 a week invested is also tax free.

The do a straight saving plan, a child saving plan and also a saving/disability plan. Death will result in either the assured figure or the value of the plan paid out to the next of kin.

You can also take out as many policies as you wish.

I have been looking for a plan for the kids mainly or possibly one for me to either use ourselves or pass over to the kids when we see fit.



Is this any good in comparison to other companies?
Basically is it worth it?

dunstonh

I doubt many have heard of this but its especially for rail workers who are track safety qualified.

The name of the provider didn't ring a bell but the product certainly does.

this any good in comparison to other companies?

Absolutely dire. Indeed, it is pretty much one of the worst I have seen. However, there are so few of these left nowadays as they are nearly 20 years obsolete, that there isnt much of a pot to choose from.

It is a friendly society savings plan. It works on the same basis of an endowment policy. However, it is tax free. The problem is that the tax free status is largely pointless. You can have realised gains of £10k a year without paying capital gains tax. So, a premium of this size is never going to be subject to CGT. There is no income tax but then the plan cannot claim the tax back on equities. Only on fixed interest securities in the same way ISAs can. It just avoids any higher rate tax cost and then its only on the dividend income, which on a small value is going to be tiny. So, the tax free position is largely pointless.

It's biggest failing though is that it has a TER of around 3.6% p.a. A range of decent managed unit linked funds in a an ISA would be under 2%. So, you can see the big cost difference.

These plans are obsolete. To give you an idea of how obsolete, if an IFA was to recommend one now, they run the risk of it being classed a mis-sale given how poor they are to alternatives.

This is why only Unions and trade associations still sell them. They get paid a cut of the big commission and as the decision to buy is non-advised, you have no-one to complain to so they dont have any liability.

jonnyb1978

Thanks.. Done bit of research myself and come to same conclusion.