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L&G Investment Bond
grizzly1911
Posts: 9,965 Forumite
A relative has one of these.
It was taken out in 2004.
It provides a small monthly income c.2% p.a. and has shown a slight real terms increase in value of around 1.5% p.a.
A Friends Life version has proved a much better return. c4.4%/4.6% respectively.
The L& G Bond has a surrender charge of 2.5%.
Why would a surrender charge apply this far into it's life?
I could understand in the formative years it may be to cover selling commission and set up costs.
Is the surrender charge likely to have a cut off point, say 10 years from inception?
Sorry I don't have sight of the actual bond wording at this point in time only a valuation.
It was taken out in 2004.
It provides a small monthly income c.2% p.a. and has shown a slight real terms increase in value of around 1.5% p.a.
A Friends Life version has proved a much better return. c4.4%/4.6% respectively.
The L& G Bond has a surrender charge of 2.5%.
Why would a surrender charge apply this far into it's life?
I could understand in the formative years it may be to cover selling commission and set up costs.
Is the surrender charge likely to have a cut off point, say 10 years from inception?
Sorry I don't have sight of the actual bond wording at this point in time only a valuation.
"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham
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Comments
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Are you sure it's a surrender penalty and not a 'market value reduction'? These can apply to With Profits Bonds. I think early surrender penalties are normally clear after 5-6 years, but I'm not sure, just a general impression I had.0
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A 'real terms increase in value' would be after allowing for inflation. So 1.5% pa plus inflation - is that what you mean?grizzly1911 wrote: »has shown a slight real terms increase in value of around 1.5% p.a.“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Glen_Clark wrote: »A 'real terms increase in value' would be after allowing for inflation. So 1.5% pa plus inflation - is that what you mean?
My error, nominal."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Shaolin_Monkey wrote: »Are you sure it's a surrender penalty and not a 'market value reduction'? These can apply to With Profits Bonds. I think early surrender penalties are normally clear after 5-6 years, but I'm not sure, just a general impression I had.
You may well be correct, it has just been shown as a surrender charge on a letter from an intermediary. I need to access the bond but can't do so for another couple of weeks."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0
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