10 year savings plan just matured

rothers

On the annual statement that I have just received it states,

"The investment return on our life fund is the single biggest thing that affects the returns members get on their savings. Our investment return in 2012 was one of the strongest in the sector.

The return before tax on the Life Fund was 11%. It should be noted that past performance is no guarantee of future performance.

Maturity values are higher now than they have been in 7 out of the past 10 years since May 2003 based on a 10-year Regular Savings Plan."

Does that affect anyone's thinking?

Cheers all.

bigadaj

rothers wrote: »

On the annual statement that I have just received it states,

"The investment return on our life fund is the single biggest thing that affects the returns members get on their savings. Our investment return in 2012 was one of the strongest in the sector.

The return before tax on the Life Fund was 11%. It should be noted that past performance is no guarantee of future performance.

Maturity values are higher now than they have been in 7 out of the past 10 years since May 2003 based on a 10-year Regular Savings Plan."

Does that affect anyone's thinking?

Cheers all.

I think the phrase one of the best in the sector is key.

Depending on the actual dates of their quoted year, then many equity investments would have doubled or more that return, again no gaurantee and past eprformcance is no guide to future performance etc.

Also they quote the return as before tax, which would nt apply to isa or pension investments generally. Not personally for you anyway. Is this return they quote before or after charges as well?

dunstonh

rothers wrote: »

On the annual statement that I have just received it states,

"The investment return on our life fund is the single biggest thing that affects the returns members get on their savings. Our investment return in 2012 was one of the strongest in the sector.

The return before tax on the Life Fund was 11%. It should be noted that past performance is no guarantee of future performance.

Maturity values are higher now than they have been in 7 out of the past 10 years since May 2003 based on a 10-year Regular Savings Plan."

Does that affect anyone's thinking?

Cheers all.

Doesnt change opinion in any way. Remember that warnings have been issued to IFAs not to recommend these plans as they could very likely be considered mis-sales. That is why they are now being sold direct without advice.

The police mutual charges are some of the highest you can see. I remarked about this on another thread recently. Their charges show that if you get a return of 4.65% p.a. on the fund, you would lose 3.7% p.a. due to charges in the first five years. I havent seen negative reduction in yield figures since the 90s. You lose 2.45% p.a. average on charges on a non-advice product in a near obsolete investment fund.

If they want to boast about an 11% return before tax and charges in 2012 then how does that compare with say invesco perpetual distribution fund (example given that IP allow £20 pm). That fund grew 18.21% in 2012 after tax and charges. And it has no pointless life cover to pay for either.

That is not picking the best fund. It is picking an alternative that meets objective on a similar risk profile.

atush

yes, an investment trust savings plan would be a good choice for the OP instead, including the invesco perpetual range ( I have one with them i started over a decade ago with just 20/m)

geelamch

Hi atush,
Just reading some posts and was interested in the investment trust savings.
Could you possibly share a few details ? Looking to 10years max for about 150 monthly.
Thanks in advance

atush

You find a trust you like (or several) that invests in an area you like then you find out if they have a savings plan and join it.

There are hundreds of trusts, from good old generals (like F&C I have a plan with them) to private Equity (such as Graphite enterprise) to emerging markets (aberdeen asian smaller companies is one I hold but outside a plan). There are some that specialize in income, paying out a good yield.

Plans run from 20/m for invesco perpetual, up to 500/m for some of the income specialists. Most are around the 50/m mark. Some charge you a set nominal fee for buying plus stamp duty, others an annual charge that covers buying/selling costs.

Look at Trustnet for performance, and Motley Fool for discussions, esp of income trusts.