Scottish Friendly MoneyBuilder help

sweetpotato

Hi all,

I decided to start saving some money for the future and I thought at the time the money builder looked a good option for me.

I opted to pay £15 p/m then it increases by £3 per year until year 6 when the payments double to £30 until year 15.

I was totally happy with it and I have currently paid in £564. I've just found out I'm pregnant (planned) and I'm starting to look at where we can shave some money off monthly outgoings.

I rang them today and my investment is worth £165 and I know this is because the market price fluctuates etc but my question is;

By the time this plan ends I would have paid in a total of £4896, I am only guaranteed to get back a sum of £4447 is it worth cashing in now and cut my losses and save as and when I can in an ISA (I'm not sure maternity wise how much I would receive) or should I continue to pay it?

I should add I am not complaining at the amounts I would receive as it was all detailed to me in the pack, I'm just trying to figure out whats best to do.

TIA

Steph

Reaper

Friendly Society savings plans are not good choices these days. Charges are high and eat into performance.

sweetpotato wrote: »

I rang them today and my investment is worth £165 and I know this is because the market price fluctuates

Not really. It sounds like you have had it running for 3 and a bit years. The amount you get back is limited in the early years. If you had tried to surrender it in year 1 or 2 you would have got zero back.

By the time this plan ends I would have paid in a total of £4896, I am only guaranteed to get back a sum of £4447 is it worth cashing in now and cut my losses

The guaranteed minimum is just that. It can be more. You haven't made any loss until you surrender it.

If you had asked me whether you should have taken out the policy in the first place I would have said no. However since it has been running for over 3 years I think you should continue (unless money is really tight) as you will definitely make a loss if you stop now, but stand a good chance of not doing so if you continue.

sweetpotato

Thanks Reaper

That's what I meant sorry it's because in the first two years they use what I paid for life insurance - I'm worth £3600 should I die haha. Yes, I wouldn't have got anything back if I cashed it out before the start of the third year.

I don't think I would take another one out and to be honest I don't think I really understood it when I took it out.

I shall try and keep it on, I know the contribution is small so hopefully I should manage it fine

dunstonh

I don't think I would take another one out and to be honest I don't think I really understood it when I took it out.

These plans have been largely obsolete since the mid 90s and advisers are warned off them now as potential mis-sales. So, I wouldnt do another if I was you.