Tax Exempt Savings Plans [TESPs]

Archi_Bald

jimjames wrote: »

Good question. Despite repeated requests we've not had any definitive answers of who these kind of obsolete plans would actually be suitable for.

Anyone with under £15k can get better options inside an ISA.
Anyone with over £15k can do better with unwrapped investments.
Basic rate taxpayers pay no additional tax so the tax free status is irrelevant
Higher rate taxpayers are unlikely to be bothered with £25pm if they can already fill an ISA with £15,000.

Who does that leave?

Agree entirely. And with £1,000 tax free interest per year to come for BR tax payers, these TESPs become even more redundant than they were before.

(Text removed by MSE Forum Team)

planteria

i just see TESPs as something small that sit alongside other investments, with the "earning a return on money i am yet to invest" being a nice concept. where this can be done outside of the £25/m TESP limit this is obviously of more significant benefit:).

masonic

planteria wrote: »

with the "earning a return on money i am yet to invest" being a nice concept

I hear it's also possible to earn a return from them without investing at all

People should look beyond silly gimmicks like this to the actual return on their money. No point locking into a poor rate just because more of that return is paid upfront. So, how do the current returns on offer compare with the conventional regular savings accounts available today?

planteria

masonic wrote: »

I hear it's also possible to earn a return from them without investing at all

how is that masonic?

planteria

masonic wrote: »

...just because more of that return is paid upfront.

i'm not sure what you mean by this either masonic:think: no upfront return from the plans i have. but the annual bonuses can be calculated based upon the 'sum assured' which is based upon the total that will be invested during the plan.

masonic

planteria wrote: »

how is that masonic?

Well, planteria, I've heard it said that some of these societies will pay a referral fee to those who introduce new members. Not that I'm saying that's what's going on in this thread, of course.

So, do you know how the current returns on offer compare with the conventional regular savings accounts available today? Let's say, for sake of argument, I was about to open an HSBC Advance current account to get their save together offer and was torn between their 6% regular saver and one of these plans?

masonic

planteria wrote: »

i'm not sure what you mean by this either masonic:think: no upfront return from the plans i have. but the annual bonuses can be calculated based upon the 'sum assured' which is based upon the total that will be invested during the plan.

Ok, accrued upfront...No point locking into a poor rate just because more of that return is accrued upfront.

planteria

masonic wrote: »

Ok, accrued upfront...No point locking into a poor rate just because more of that return is accrued upfront.

sorry, no, still not with you.

and Cash and Investment: not really comparable.

masonic

planteria wrote: »

sorry, no, still not with you.

and Cash and Investment: not really comparable.

So these are not savings plans and not subject to FSCS protection?

What are they? Corporate debt? Equity investments?

masonic

Nevermind, from what I've just read these are endowment policies generally invested in with-profits investment funds, so not at all like cash savings and obviously carry investment risk.

Seems like these are not worth considering until after filling your S&S ISA, and by that time £25 per month seems a pointless amount when you're already investing £1,270 per month.

Essentially, this...

jimjames wrote: »

Anyone with under £15k can get better options inside an ISA.
Anyone with over £15k can do better with unwrapped investments.
Basic rate taxpayers pay no additional tax so the tax free status is irrelevant
Higher rate taxpayers are unlikely to be bothered with £25pm if they can already fill an ISA with £15,000.

Who does that leave?