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With profits bond

edited 30 November -1 at 1:00AM in Savings & Investments
14 replies 2.3K views
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  • paylesspayless Forumite
    6.9K posts
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
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    who the heck is GEC

    Think you know this anyway

    GE Life is part of US based GE Financial...........

    GE Financial is a member of GE Insurance..........

    GE Insurance is part of General Electric Company, a diversified services, technology and manufacturing company with operations worldwide.

    ---
    I dont get involved in investments these days, so don't know for sure what products they currently have
    ( again I did not think they had a distribution fund - but could be wrong)

    In past they have had  High Income Bonds, and do have a variety of funds

    ( for high income, you might want to read capital not always  guaranteed)
    Any posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.
  • dunstonhdunstonh Forumite
    105.9K posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
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    I thought it was gen elec but i have never seen the insurance side referred to as GEC before. I didnt want to jump to conclusions.

    Is the rate of return gross or net? (assuming its not a life bond)

    Its a judgement call. One guarantees that you will have a return for the next 5 years. Which after MVA, leaves you with 9% at the end of the term (avg 1.8%pa). The other is based on potential. It could reduce the MVA over the coming years and start paying a small bonus again but that will be dependent on future performance. Plus the parent company of Abbey may not want scot prov and do nothing with it. There are rumours going round that they dont want it.

    If you dont mind a little dabble, you could look at a life bond as i mentioned and get you ifa to refund some of the initial commission and then go into low risk founds. Say he gives you 108% and it makes 5% pa (gilts, corp bonds and commerical property being lower risk areas). You could be looking 33% net of brt at the end. minus the 22% MVR from scot prov is 11%. An option like this has potential to pay more or less. If you dont mind a little risk that is. Norwich Union reckon that the property fund returns for the next couple of years arent going to be double figures for the last few years but expect around 7-8% per annum.

    If you really want out and understand its going to cost you 22%, then fair enough. I'm not sure going into a fixed rate product at 6.2% is such a wise idea though. Interest rates are expected to go up again this week after all and the cycle isnt yet complete.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • lara1983lara1983 Forumite
    91 posts
    The mva has also been worrying my parents today as they have just received their annual GA portfolio bond return. Since they've invested in 1998 with £10,000 their cash in value now is only £11,048.97. this is really worrying. Their total value is 12,352.01 and their final bonus is a big fat zero! amazingly, the number of units held has also gone down from 5707 units in 2001 to 5650 in 2004- what does tis mean?? now they're stuck. Would they be better to withdraw now and cut their losses, or hold out? All help would be GREATLY appreciated, as this is, as usual, the only place where you can get an honest answer and straight talk.
    Thanks,
    Lara
  • paul666paul666 Forumite
    95 posts
    the number of units held has also gone down from 5707 units in 2001 to 5650
    Sometimes, the life co takes management charges in the form of units.
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