Police Mutual Guaranteed Investment Bond

Lothianred

I have recently retired from the police and have around £50000 I wish to invest. Has anyone invested in the Police Mutual Guaranteed Investment Bond, and advise me if it is reasonably safe to invest here.

Many thanks

dunstonh

Rubbish. Obsolete. Expensive and not tax efficient.

Lothianred

Thanks Any way you can expand on that?

delmar39

dunstonh wrote: »

Rubbish. Obsolete. Expensive and not tax efficient.

What are your thoughts on Police Mutual Regular Savings 10 year plan? They're great when they mature and you make a decent return but charges are high compared to say a low cost s&s index tracker. Thoughts?

jimjames

delmar39 wrote: »

What are your thoughts on Police Mutual Regular Savings 10 year plan? They're great when they mature and you make a decent return but charges are high compared to say a low cost s&s index tracker. Thoughts?

You've got it in one.

Why would you use that when a s&s ISA is so much better value and far more flexible?

Archi_Bald

jimjames wrote: »

Why would you use that when a s&s ISA is so much better value and far more flexible?

Answer: Because the outfit that sells these Police funds has scared the living daylight out of you about how much you could lose if you didn't invest with them. They omit to tell you much about how DIY or IFA-recommended investments work on a historical/statistical basis, and they certainly won't tell you how their charges (that you can't avoid once you signed up with them) will eat into your investment, oftentimes by tens of thousands, and sometimes even hundreds of thousands, of pounds.

So you are now emotional and irrational, and quickly sign up to the "safe" plan. Or may be you don't, because you have come across the MSE forum...

Totton

That seems quite over the top, I doubt the Police Mutual have scared the living daylights of the OP.

They are a safe but likely to under-perform offering, I'd be looking elsewhere for the 50k. For those in service and needing some help to save then PM can be a good offering through salary deduction, having said that the PM 10 year policies haven't been great for a long time afaik but at least you get some life protection alongside potential growth. Unfortunately Copperpot are not currently taking ISA money but they can be worthwhile keeping an eye on for when ISA's re-open, the rates are usually pretty good. http://www.no1copperpot.com

If you can take the risk then I would look at alternatives such as the S&S ISA mentioned by jmjames, I am using Investment Trusts in mine but stock markets are very risky unless you have a decent time horizon before needing the money.

Best of luck in 'retirement'

JB9302

I agree with the above comments regarding the Police Mutual Regular Saver , the returns arn't great but I used them as indicated above through salary/pension reduction .
I am almost 6 yrs into my latest one paying £43.33pm , latest statement (April) showed value about equal to what I have paid paid in , there is usually a terminal bonus added at the end of 10 yrs and some life protection.
I save with Copperpot as the Notice Plus A/C offers 1% over the declared dividend (recently 2.5%) , the max that can be put into that is 1K from salary/pension pm and £500 pm via debit card to a total of £40000.

Happychappy

delmar39 wrote: »

What are your thoughts on Police Mutual Regular Savings 10 year plan? They're great when they mature and you make a decent return but charges are high compared to say a low cost s&s index tracker. Thoughts?

I got flogged the same line of high returns, terminal bonus etc and had three of their 10 year "money spinners" the returns were less then that of a building society.

I wouldn't touch Police Mutual with a frosty mop, just like the Federation, they do nothing for you but cost you money, thats it i'm off again :mad::mad::mad:

dunstonh

delmar39 wrote: »

What are your thoughts on Police Mutual Regular Savings 10 year plan? They're great when they mature and you make a decent return but charges are high compared to say a low cost s&s index tracker. Thoughts?

It is an endowment policy. The last mainstream provider of endowments ceased by 2004 and the product itself was largely dead via the advice channel by the late 90s. It only exists in the non-advised world as that is where you get mugs buying them who wouldnt know good from bad.

The single premium version on this thread is an onshore investment bond. A niche tax wrapper that is really only suited to those that frequently use their CGT allowances (although that is a historic reason but doesnt really stack up any more as internal taxation of the bond is 20% and CGT at the low level is 18%). Higher rate taxpayers who will be basic rate in future and have already utilised their annual ISA allowance in full could see a benefit.

The charges are dire. There is no cost of advice and a lower level of consumer protection because of that. Yet this product has an initial charge. DIY products with no advice dont have initial charges in the modern priced world. Indeed, at £50k, you are paying more on this product for no adviser than you could be for an adviser product. The annual charge is 1.25%. That isnt too bad for an old fashioned with profits fund. However, with unit linked multi-asset funds available cheaper and without the with profits baggage, you struggle to see what this has to offer.

So, in summary, an old fashioned product, investing in an old fashioned, and largely obsolete investment fund with high charges for DIY using a tax wrapper that is only suitable for a minority of people. It isnt the worst example you will see (there are a lot worse). But it is a niche product in terms of suitability and chances are you are not in the niche area where it would be suitable.

dunstonh

I am almost 6 yrs into my latest one paying £43.33pm , latest statement (April) showed value about equal to what I have paid paid in , there is usually a terminal bonus added at the end of 10 yrs and some life protection.

That just shows you how bad it is. 6 years in and including a period of strong growth and you are only at breakeven.