Maximum Investment Plan extension

exurbia

I was the owner of a Skandia Maximum Investment Plan dating from the 1980s, now administered by Old Mutual Wealth. Approaching the tenth and twentieth anniversaries, Skandia had notified me of the option to extend for a further ten years and I did so. On the thirtieth anniversary Old Mutual Wealth failed to notify me of the option to extend. As a result most of the policies have matured, and I have lost the valuable tax advantages that were preserved with them.

I wonder if anyone else has had a similar experience? I don't believe that the option to extend on an old plan like this was in any way affected by the 2012 Budget changes. I bought the plan directly, and no financial adviser was ever involved.

dunstonh

and I have lost the valuable tax advantages that were preserved with them.

What valuable tax advantages were these?
These types of plans were obsolete by the mid 90s. Most of them have long gone with people moving to modern, more tax efficient options. What is it about the MIP that you believe is better than the modern alternatives?

I wonder if anyone else has had a similar experience?

Have they confirmed that they failed to send it or did they send it and you didnt receive it?

kingstreet

This has me thinking very, very hard.

What was the change that took place in late '87 or early '88 that the proceeds of a qualifying policy could no longer remain invested tax-free and withdrawn as income?

exurbia

Thanks for your replies. The valuable tax advantages are that all income and gains are free of tax. In addition, this particular MIP has a switch feature so that the investor can switch existing funds invested between a wide range of investment funds.

Changes in the 2012 Budget mean that annual investments into MIPs must not exceed £3,600 or they become non-qualifying. In addition the RDR rules severely affected what could be done with this particular MIP, which was set up to pay commission, so that it then added restrictions. For example it ceased to offer the annual ability to top up contributions. So I can understand how an IFA might regard these schemes as obsolete, certainly from a new product point of view.

But none of this affected my plan, because my annual investment was less than £3,600, I did not wish to top it up, and the ability to extend the scheme was not affected. On the other hand, after 30 years of contributions, the sum invested had become substantial.