London Capital and Finance

edited 1 September 2016 at 1:14PM in Savings & Investments
2.1K replies 432.3K views
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  • dunstonh wrote: »
    You cant put odds on failure. Lehmans failed. What odds on failure would they have got pre credit crunch?

    This is not a retail product. It is a direct investment with no consumer protection if it goes wrong. i.e. 100% loss potential with no FSCS protection. Not suitable for inexperienced investors. However, as part of a balanced portfolio of shares and fixed interest securities, it could have a place.

    Do you have a balanced portfolio of shares and fixed interest securities?
    I have money in fixed investments with returns that just beat inflation after tax. But your argument on Lehmans is a perfect example. Even large established banks go bust. So there is a 1% failure that your bank goes bust. And the FSA rules could change tomorrow and they decide not to compensate anyone, when you have just invested all your money yesterday. But we all take these "safe" gambles or we would just have to have very big mattresses and hope inflation isn't too high!

    My problem is that, after tax (and most investors are likely to be paying 40% not 20%) the interest rates offer are little above inflation. Where investments require regular investment over a period of time it effectively reduces the return you can get on your capital. I can save £3000 with HSBC over a year at 6%. But because it has to be sequential deposits, my average amount invested is only £1500, so half my money has to sit elsewhere waiting to be invested and overall this effectively drops the interest to 3% which after tax at 40% is less than 2%. So back to inflation.

    8% a year for 3 years is very good even after tax. All investments of this type carry a risk but if the company has been successfully delivering for many years I would consider the risk lower than if they have a poor track record of regular losses for investors. But is there a way I can check this out?
  • bigadajbigadaj Forumite
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    Most companies deduct 20% standard tax from interest payments unless you can show them you do not pay tax. They cant know what other investments and interest you get. But when you fill your tax return you enter earnings and interest, and tax paid. If you paid too much you will get a rebate. But be aware that tax on savings is at your highest rate and also I understood there is no £1000 free interest allowance for higher tax rate payers. So you could actually be liable for more. Make sure you check your own allowance and obligations.

    Higher rate taxpayers retain a £500 tax free interest rate allowance which is lost to additional rate taxpayers.
  • bigadajbigadaj Forumite
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    I have money in fixed investments with returns that just beat inflation after tax. But your argument on Lehmans is a perfect example. Even large established banks go bust. So there is a 1% failure that your bank goes bust. And the FSA rules could change tomorrow and they decide not to compensate anyone, when you have just invested all your money yesterday. But we all take these "safe" gambles or we would just have to have very big mattresses and hope inflation isn't too high!

    My problem is that, after tax (and most investors are likely to be paying 40% not 20%) the interest rates offer are little above inflation. Where investments require regular investment over a period of time it effectively reduces the return you can get on your capital. I can save £3000 with HSBC over a year at 6%. But because it has to be sequential deposits, my average amount invested is only £1500, so half my money has to sit elsewhere waiting to be invested and overall this effectively drops the interest to 3% which after tax at 40% is less than 2%. So back to inflation.

    8% a year for 3 years is very good even after tax. All investments of this type carry a risk but if the company has been successfully delivering for many years I would consider the risk lower than if they have a poor track record of regular losses for investors. But is there a way I can check this out?

    You've got to compare like with like.

    This product sounds like it would be a high risk investment for what might be termed sophisticated investors.

    The interest rate is high but the risks seem to be concentrated and unsuitable for most investors in my opinion.

    A better alternative might be a corporate bond fund, like a shares based unit trust or oeic, then your risk to an individual company is reduced and the failure of a single company has an impact that is relatively low.

    Alternatively peer to peer lending might be considered, several platforms offer 10-14% return generally in secured lending with property, industrial equipment, containers, aircraft etc as collateral. One of the issues with these is that you purchase parts of individual loans and so have to do research in each loan which is time consuming if you have large amounts to invest, but at least you a spreading your risk, and one loan failure will only result in a Relatively minor loss.
  • jimjamesjimjames Forumite
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    So anyone actually give any pointers as to how to sensibly assess this type of risk for someone who may have enough money to risk some of it but not wanting to literally throw it in the bin?
    Have you already filled your S&S ISA allowance? If you're prepared for the kind of risk with this "investment" then I assume you already have plenty of other investments too not just savings.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • nb0825nb0825 Forumite
    115 Posts
    colsten wrote: »
    One person can put £6,800 into an HTB ISA over 2 years.

    Two people can put £13,600 into an HTB ISA over 2 years.

    A far cry from the £25,000 you said your son wants to invest now. And where's the money whilst a part of it waits to be drip-fed into the HTB ISAs?

    Your maths seems a bit off

    £1000 when opening account
    £200 * 24 = £4800
    total = £5800

    I would put the whole sum into a santander 123 account and drip feed into the HTB isa
  • brownstubrownstu Forumite
    1 Post
    MoneySaving Newbie
    Hi...brand new to this site and have but a little knowledge of the financial scene,

    However, before anyone thinks of investing in London Capital & Finance I would go to the "Companies House". site first. They have changed company name 4 times in 4 years....a bit questionable me thinks?
  • mezzamaymezzamay Forumite
    22 Posts
    I'm glad I found this thread - I was considering investing in this company... I had partially filled out the online application and got cold feet. Then I came here. Thanks for all the advice and research.
    I have been pestered by them since I started the application... they seem to be attempting a hard sell!
    I think we should always be wary of things that seem too good to be true! 8% for 3 years is very tempting!
  • jimjamesjimjames Forumite
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    mezzamay wrote: »
    I think we should always be wary of things that seem too good to be true! 8% for 3 years is very tempting!

    I'm not sure it is really very tempting. I get 5% per year so even without compounding that's 15% over 3 years and totally guarateed, FSCS protected!

    Glad you didn't get caught out though.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • I thought this looked quite interesting as have done something similar with Golfbreaks very successfully. However I looked up the details of the Company on Companieshouse website which gives all the info and history of the Company and is quickly and easily readable. After reading this I decided it was not for me so I recommend anyone looking at an investment take the time to do a little bit of research with Companieshouse website. I personally think there are some good investment opportunities out there but everything needs carefully looked at.
  • edited 11 September 2016 at 6:47AM
    BionicbellyBionicbelly Forumite
    1 Post
    edited 11 September 2016 at 6:47AM
    Hi all, apologies if this has already been covered.

    I must admit I looked at these, (who would not with 8% pa for a 3yr investment? paid quarterly)

    I could not find any existing investors to ask.

    However, what put me off is the fact they appear to have changed their name a number if times over the past 4 years or so - not a trait I would expect from such a company. Their latest accounts does not fill me with confidence either which appears to indicate very little in the way of cash.

    check them out at companies house (look for the beta website)


    I am also concerned that some of you are relying on their website for information - lets be honest here - anyone can set up a website and say what they want ~ (even I have a website :j:j:j ) - regretfully the dishonest few have made us all suspicious of the honest many.

    This may be a genuine company with all good intentions, but how do you prove that independently.

    So in the words of the well known TV programme - I'm Out
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