Tax Exempt Savings Plans [TESPs]

planteria

what do people here think of these plans, exclusively available via Friendly Societies?

"Under current legislation the maximum individual investment in a tax exempt savings plan, which is a type of qualifying policy with a special tax status, is £25 per month or £270 annually."

this is in addition to an ISA allowance.

innovate

Why is it £270 a year and not £300?

Whether £270 or £300, what are the benefits to me stashing away, in a tax-shelter, that amount of money in addition to my ISA?

If I did have £270 or £300 in addition to my annual ISA allowance, why would I want to invest them with a TESP, rather than putting the same money into a pension (with my employer, and/or a SIPP)?

How many people have got more than their annual ISA allowance to invest?

planteria

if you contribute in one annual lump sum, the limit is £270.

dunstonh

what do people here think of these plans, exclusively available via Friendly Societies?

Rubbish, obsolete, expensive and can be classed as mis-sold if done under advice.

However, you already know this given the (text removed and edited by MSE Forum Team) thread you've created recently.

Give it up.

planteria

it would be in addition to your ISA. just an additional investment. if you 'stashed' that away, you'd have more money when it matures.

it wouldn't need to be tied-up until retirement, as would a SIPP or other pension.

and an awful lot, i would imagine, of those that are committed to saving for the future.

innovate

planteria wrote: »

if you contribute in one annual lump sum, the limit is £270.

So if I contribute £25 a month, I can stash away £300 a year?

planteria

this is the second i've created, other than the one asking where the first one had gone. just thinking there could be some proper discussion here, without any reason for bitterness.

planteria

"So if I contribute £25 a month, I can stash away £300 a year?".

that is my understanding, yes. seems strange to me, too.

innovate

planteria wrote: »

and an awful lot, i would imagine, of those that are committed to saving for the future.

If I am committed to saving for the future, I would most likely opt for a pension contribution ---- not least because my employer and/or the HMRC actually contribute a significant amount to my own contribution. Nothing like that in a TESP.

Anyway - - how long does a TESP need to be tied up for in order to reasonably expect any half-decent return?

planteria

good question. mine are set to run for 10 years.

innovate

planteria wrote: »

good question. mine are set to run for 10 years.

Given you get a referral bounty for these TESPs, wouldn't you know for certain?

What happens if you want your money after 1, 2, 3, 4 etc years?