10 year savings plan just matured

rothers

Hi all,

I have just had a 10 year savings plan mature.

Monthly payment £14.99
Payout £2066.59

I've calculated that the interest rate I received is about 2.74%.

Could anybody comment on its performance compared with other plans maturing now, and whether I would be better off putting my next plan elsewhere. I have taken out a new plan every year for the last 17 years and the payments come directly from my wage.

Many thanks in advance,

Rothers

Archi_Bald

That sounds an awful return, given that for most of the last 10 years interest rates were way above 3% even on the worst accounts. There was a plethora of Regular Savers that paid around 5%, and even today, you can get 6% in a First Direct Regular Saver (which used to be 8% for years). Plenty of other Regular Savers, including ISA regular savers, about.

evenasus

rothers wrote: »

Hi all,


I've calculated that the interest rate I received is about 2.74%.

According the the regular savings calculator on MSE - paying basic rate tax, it's actually 3.41%

Archi_Bald

Which is still awful if you could have netted at least 5%, probably more, after BRT

Shaolin_Monkey

I'm guessing these are endowment savings plans (aka maximum investment plans)?

rothers

Thanks for your replies guys. I used an online calculator to calculate the interest rate but must have got it wrong. I don't think that there was any tax to pay because it was a ten year plan, is an endowment. Am I right in thinking that the first direct account only earns 6% in the first year?

opinions4u

Which company provided this plan?

I'm assuming it was a friendly society - inflexible, high charges, tiny tax benefit and £20 in M&S vouchers or a pen up front.

innovate

rothers wrote: »

Am I right in thinking that the first direct account only earns 6% in the first year?

You might be confusing 2 accounts - Nationwide FlexDirect which pays 5% for 12 months on up to £2.5K, and the First Direct Regular Saver, which runs for 12 months and pays 6% AER on max £300 a month. For the FlexDirect, you have to deposit £1,000 a month to get any interest. You can have a new First Direct Regular saver every 12 months. Obviously neither of them guarantee their AER beyond 12 months.

dunstonh

10 year savings plans went obsolete around 1995. You would have bought this in 2003. So, way past the point they were obsolete. I woudlnt consider another one as modern alternatives are better. However, there are still some stragglers out there that you should avoid.

rothers

Again, thanks to all for replying. The plan was with the Police Mutual, a regular saver. I've taken a new plan out ever year for the last 17 years so will have another 9 maturing in the next few years.

Could you please give me examples of better saving plans?

Thanks for all your help!

innovate

rothers wrote: »

Could you please give me examples of better saving plans?

I have already listed a couple of savings accounts that do/did miles better. What do you think of them?