Teachers Assurance Guaranteed Growth ISA

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
48 replies 4.7K views
blueflyingtonightblueflyingtonight Forumite
106 Posts
edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
Is this stocks & shares based ISA worth it? i.e. are the charges high compared with other similar products?

Charges: Initial 3% of investment. If you keep it for 6 years there is an annual charge of 1.2%

What is guaranteed: after 6 years you will get 106% of what you invested back.

Money is invested in the Teachers Provident Society Limited Unitised With-Profits Fund.

I have other stocks & shares ISAs and this one looks attractive because of the guaranteed return. Cash ISA allowance is maxed out.

Many thanks

Steve
«1345

Replies

  • innovateinnovate
    16.2K Posts
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    A lot depends on how much money we are talking about, and for how long you want to invest it.

    If all you get back after 6 years is 106%, it sounds like you are losing money on the charges. What happens after the 6 years?

    The charges look very steep in themselves because you can get many funds with no initial charge and very low annual charges. They don't guarantee any returns though.

    Furthermore, you would get more return from one or more of the interest-bearing current accounts. Also regular saver might be an option. These options aren't obviously adding to your tax-free balance but the superior return might be worth it.

    A further option might be a SIPP.
  • I am aged 56 took early retirement last year so I am in receipt of a pension. I am now working as a consultant so have an additional income. I would be looking at it as an investment that would return in about 5 years so would a SIPP be a suitable investment for me?

    Thanks

    Steve
  • innovateinnovate
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    5 years is a bit short for an investment. If I were you (but I am not!) I would most likely look at Regular Savers and interest-paying current accounts.
  • jem16jem16 Forumite
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    I would be looking at it as an investment that would return in about 5 years so would a SIPP be a suitable investment for me?

    A SIPP is a pension - is that what you're looking for?
  • Wasn't looking for a pension but the first reply to my post suggested a SIPP. I am in the fortunate position of having cash assets that I am looking for the best return on. Happy to lock some of it up for 5 years. I am using the highest interest savings accounts that are available but they are returning at rates below inflation.

    Steve
  • jem16jem16 Forumite
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    Wasn't looking for a pension but the first reply to my post suggested a SIPP. I am in the fortunate position of having cash assets that I am looking for the best return on. Happy to lock some of it up for 5 years. I am using the highest interest savings accounts that are available but they are returning at rates below inflation.

    Steve

    5 years is probably the minimum for any investment but longer would be better. The structured product that you are looking at isn't really great and you could probably do better with an ordinary S&S ISA but without the guarantees. As soon as you introduce a guarantee, it comes at a price.

    Very few savings accounts paying decent interest but quite a few current accounts paying 3% - 5%.
  • dunstonhdunstonh Forumite
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    Is this stocks & shares based ISA worth it? i.e. are the charges high compared with other similar products?

    Charges: Initial 3% of investment. If you keep it for 6 years there is an annual charge of 1.2%

    3% initial for a non-advice product compares with 0% initial everywhere else.
    Money is invested in the Teachers Provident Society Limited Unitised With-Profits Fund.

    yuk
    I have other stocks & shares ISAs and this one looks attractive because of the guaranteed return. Cash ISA allowance is maxed out.

    Expensive, low potential for growth and a waste of the ISA allowance really.
    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.
  • ffacoffipawbffacoffipawb Forumite
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    Is this stocks & shares based ISA worth it? i.e. are the charges high compared with other similar products?

    Charges: Initial 3% of investment. If you keep it for 6 years there is an annual charge of 1.2%

    What is guaranteed: after 6 years you will get 106% of what you invested back.

    Money is invested in the Teachers Provident Society Limited Unitised With-Profits Fund.

    I have other stocks & shares ISAs and this one looks attractive because of the guaranteed return. Cash ISA allowance is maxed out.

    Many thanks

    Steve
    dunstonh wrote: »
    3% initial for a non-advice product compares with 0% initial everywhere else.


    yuk



    Expensive, low potential for growth and a waste of the ISA allowance really.

    Almost as bad as those dreadful Axa Sun Life plans prostituted by Carol Smilie. Double yuk.
  • jimjamesjimjames Forumite
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    Wasn't looking for a pension but the first reply to my post suggested a SIPP. I am in the fortunate position of having cash assets that I am looking for the best return on. Happy to lock some of it up for 5 years. I am using the highest interest savings accounts that are available but they are returning at rates below inflation.

    Steve

    A SIPP or an ISA is just the wrapper so you can have various investments inside them.

    If you are already drawing a pension then maybe a SIPP isn't the right option but you can certainly use a S&S ISA with income producing investments inside it.

    At your age you may need to have your capital inflation proofed for 30 years so investments are probably a good option rather than cash.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • innovateinnovate
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    I suggested a SIPP as a "might be an option" before the OP revealed that they are 56 and already drawing a pension. On the face of it, a SIPP is now not such a good idea - - certainly not before all the ISA allowance is used up.

    However, given the OP said they would be "happy to lock up for 5 years", neither an S&S ISA nor a SIPP seem appropriate. If there were an option to invest for longer, then first maxing out the ISA (with some decent fund(s)), and then may be £3.6K into a SIPP might still be an option. HMRC pay £720 of the £3.6K, and 25% of the SIPP can be drawn cash-free any time the OP likes. The other 75% will be taxable at whatever rate the OP needs to pay.

    If, however, the surplus money can only be locked up for 5 years, then I would do as I said before: put it into Reg Savers and interest-bearing current accounts.
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