Prudential offshore bond

Francesanne

Little concerned that friend's elderly mum(90) has been advised to invest a large amount of money from the sale of her house into a Prudential Offshore Bond. The mum is frail but very alert & bright mentally. She's in a retirement home and sale of house will continue to help fund her care. It really isn't any of my business & her daughters seem happy with choice. She's also invested part of house sale into 'normal' savings and bonds. Just concerned it's very complex and not suitable for non experienced investors. Am I concerned over nothing?

dunstonh

Just concerned it's very complex and not suitable for non experienced investors.

Its a tax wrapper. Just like an ISA, pension, onshore bond etc. There is no complication in the wrapper. The investments within the wrapper is what matters.

At 90, it does seem a bit late to invest. However, an offshore bond can be assigned and it could be a way to reduce tax.

I suspect the choice your friend had was to leave the money in the bank and know that the interest wont meet the costs and will see capital erosion vs an annuity that would meet costs but would see capital disappear vs investing which could still see capital disappear but may result in enough return for that not to happen.

Aegis

Francesanne wrote: »

Little concerned that friend's elderly mum(90) has been advised to invest a large amount of money from the sale of her house into a Prudential Offshore Bond. The mum is frail but very alert & bright mentally. She's in a retirement home and sale of house will continue to help fund her care. It really isn't any of my business & her daughters seem happy with choice. She's also invested part of house sale into 'normal' savings and bonds. Just concerned it's very complex and not suitable for non experienced investors. Am I concerned over nothing?

It's an odd choice at her current stage of life unless her investment assets are very significant. Even then there are other options that might be better.

That said, I don't know her circumstances and couldn't give a complete answer without knowing why the offshore bond structure was selected for her over a portfolio of assets in her own name with the ISA allowance being used each year.

Francesanne

Aegis wrote: »

It's an odd choice at her current stage of life unless her investment assets are very significant. Even then there are other options that might be better.

That said, I don't know her circumstances and couldn't give a complete answer without knowing why the offshore bond structure was selected for her over a portfolio of assets in her own name with the ISA allowance being used each year.

Many thanks for your reply. I'm not privy to the details of the Bond structure so can't supply any more information. Just appeared very complex investment for someone of her age & financial expertise.

Aegis

Francesanne wrote: »

Many thanks for your reply. I'm not privy to the details of the Bond structure so can't supply any more information. Just appeared very complex investment for someone of her age & financial expertise.

These structures aren't necessarily over-complex, but they are relatively niche. Hence not being sure why it was recommended. It could well be appropriate, I just can't say for sure.

dunstonh

Aegis wrote: »

These structures aren't necessarily over-complex, but they are relatively niche. Hence not being sure why it was recommended. It could well be appropriate, I just can't say for sure.

Niche is certainly the word. No mention of ISA allowance being used so I wonder if trusts are involved.