Scottish Friendly Assurance....anyone has this policy?

wayoflife

Got this leaflet through my door.

Apparently they offer a savings plan which is tax free and on top of your ISA allowance. This was apealing to me, also the fact that your money is locked away so you can forget about it

Not it is one of these schemes where it is a fixed period and penalties for withdrawing early.

I looked at the illustration about the interest and I contacted them to find out this. It doesnt work on intrerest, it is based on bonuses. Ok fine, can you tell me how much the typical bonuses are? no! and they cant tell me what they were like in the past either! I got an illustration...

£25.00 a month
over 10 years
Guaranteed amount £2,600 (less bonuses)

The other 'benefit' is that it gives you life assurance, for the same amount which you are guaranteed which I am sure is littered with T&C's.

You are not guaranteed the amount you put in...

who the hell would take one of these policies out? Is this ment for older people?

If anyone else has one of these please can you highlight the benefits of this? as it seems as you are waiving a hell of a lot for the sake of a bit of tax paid.

dunstonh

who the hell would take one of these policies out? Is this ment for older people?

Mailshots dont have any advice given so they can sell rubbish products as the liability is on the person buying them and not the company as there is no adviser.

I wouldnt go near one of these as they have no benefit at all which is why you see most of them being available through direct offer only.

wayoflife

I agree Dunstoneh and trust your judgement

I thought it was rubbish and I owuldnt go near it lol

Can you advise me if there is anything like this that is worth doing? I.e. cash locked away and a decent return??

I know you are an IFA, and you can only post things for discussion purposes, so obviously I will make my decisions based on my own opinion

dunstonh

regular contribution unit trusts or invesmtent trusts would be next on the pecking order after ISAs normally. £20pm min is the usual although you get a better choice at £50pm.

EdInvestor

Friendly society bonds are normally marketed at grannies as places to save small amounts for kids.they are duff old fashioned with-profits products, as suggested.

It is not actually a terribly good idea to lock money away where you can't get at it, as it just encourages the provider to snaffle extra bits of it, since it's very difficult for you to impose the ultimate sanction and move it way.

It's better to grow up a bit and learn some financial self discipline

wayoflife

EdInvestor wrote: »

It's better to grow up a bit and learn some financial self discipline

I'm sure you mean no disrespect with this comment but I will say that at 21 I have 2 pensions, 6 savings accounts 4 credit cards 3 current accounts, 2 untouched overdrafts, premium bonds, credit union savings and no debt, I doubt you could call me Undisciplined!

lol I understand your view, but I like to look at all the options and I do like the fact that you cant get to the money and your fund matures.... If the returns are ok then I think it is worth it

EdInvestor

wayoflife wrote: »

... at 21 I have 2 pensions, 6 savings accounts 4 credit cards 3 current accounts, 2 untouched overdrafts, premium bonds, credit union savings and no debt, I doubt you could call me Undisciplined!

Hi way of life.

Wot, only 2 pensions and no mortgages?

I'm not sure there's any connection between having a collection of financial products and a sense of self discipline. But do be aware that the financial services industry relies on people not paying attention to their investments to make its profits.

If you 'buy and forget', soon what will likely happen is your unit trust stops performing, your interest rate plunges to 0.75%, your current account is charged a fee and and you owe more on your credit card from high interest than the original purchase.

They've been doing it for years.

Neil_Lovatt

Please note my conflict of interest in profile although I am posting in a personal capacity.

The money is "locked away" only because the plan needs 10 years of payments to qualify for tax-free status. The two conditions are a small amount of life cover and at least ten years of payments (although you can get away with 7.5 in certain circumstances).

Friendly Society Tax Exempt Savings Plans can be a good way to save or to get an investor into a regular savings habit. They also do not have to be set up on a with profits basis but as a link to a unit linked fund or tracker basis. They have come a long way from being marketed to "grannies"!

You'll find though that the biggest advantage with Friendly Society Tax Exempt Savings Plans is that as they are limited to £25 per month (per family member) then they can be set up with a very low premium of around £15 per month, there are few savings and investment products out there that will let people get started for such a low monthly premium.

Rather than simply voicing general opinions about Friendly Societies it's better to look at actual customer experience. Have a look at the Scottish Friendly website under customer satisfaction survey (this is the industry standard independent survey of customer opinion) you'll find that Friendly Societies always do exceptionally well in these surveys. As mutual organisations Friendly Societies have to deliver customer satisfaction and won't get very far with their owners/policyholder if they rely on "people not paying attention to their investments".