Scottish Friendly MVR

[Deleted User]

Can anyone help? I'm steaming.

I have held an old Mini Insurance ISA with the Scottish Friendly now for around 12 years. On a recent statement I saw the investment wasn't making much money per year, so I decided to look at the possibilities of cashing it in. I don't think you can transfer Mini Insurance ISAs to another provider, or can you?

Anyway, when I asked Scottish Friendly about the possibility of cashing in, I was told this was fine, but a Market Value Reduction would apply, reducing the amount I would get by about £200. I challenged this, but was told the only time the MVR wouldn't have applied is if I had cashed the ISA in on the exact date of the tenth anniversary of the account. How ridiculous.

I just wondered if anyone had any advice. Can I challenge this any further? Why should a MVR apply after the tenth anniversary? Can I appeal to the Financial Services Ombudsman?

dunstonh

I don't think you can transfer Mini Insurance ISAs to another provider, or can you?

Mini ISAs dont exist any more. The MINI/MAXI tag was dropped.
Insurance ISAs were nearly all reclassified as stocks & shares ISAs. So, yes. it is transferable.

I challenged this, but was told the only time the MVR wouldn't have applied is if I had cashed the ISA in on the exact date of the tenth anniversary of the account. How ridiculous.

You bought an investment that can go down as well as up but offers a penalty free exit point on the 10th anniversary. Most of your contributions have purchased investments above the current market price. Yet there is an element of capital security which applies on the 10th anniversary but not if you surrender before that date or decide to continue it after (although some providers will do them in 5 year cycles after that date).

Can I challenge this any further?

What is there to challenge? You bought the product and the terms were published. The company is just imposing the terms due to market conditions.

Why should a MVR apply after the tenth anniversary?

Because they insure themselves for potential losses on plans sold. 10 years is a defined date that they can put a figure on. If they allow it to go open ended after that date then the cost of the guarantees becomes expensive and a company the size of Scottish Friendly almost certainly couldnt accept a liability like that.

Can I appeal to the Financial Services Ombudsman?

On what basis? You are being charged an MVR in accordance with the policy rules. So, what rule breach do you think has taken place?

kidmugsy

"On what basis?", Dunstonh? On the basis that everything is always someone else's fault.