Scottish Friendly Scottish Bond Tax Free Savings

datlex

Has anyone had any experience of this http://www.scottishfriendly.co.uk/tax-free-investments/scottish-bond ? I noticed them on Topcashback you get £50 after 2 payments (effectively first two payments back) also you get a £25 gift card from them. I noticed that you can't withdraw in first 2 years.

buyhighselllow

Endowment policy by the looks ?

masonic

Products from Friendly Societies are often absolute rip-offs. This one seems to be one of the worst I've taken a look at.

Always look at the key features, in particular the charges and the effect of the charges on what you might get back.
http://www.scottishfriendly.co.uk/uploads/pdf/products/scottish-bond/scottish-bond-key-features.pdf

Looking at the table on page 3, in the first year, you pay in £300 and pay £300 in charges. At the end of this first year your plan is worth £0. Because of your cashback and gift cards, you get £75 back, so you've paid £300 for £75. Sounds like a great deal!

It takes the next 9 years to recover that loss (assuming the same 5% growth, which is not guaranteed), so that at the end of 10 years you get back a little more than you paid in.

Overall rate of return (including cashback and gift cards) less than 1%. That's from an investment that's estimated to grow at 5% per year, so charges are equivalent to about 4% per year.

As the key features document says, "Putting it another way, leaving out the cost of life cover,
this would have the same effect as bringing the investment growth used down from 5% to 0.5% a year." :eek:

Bargepole time!

jimjames

datlex wrote: »

Has anyone had any experience of this http://www.scottishfriendly.co.uk/tax-free-investments/scottish-bond ? I noticed them on Topcashback you get £50 after 2 payments (effectively first two payments back) also you get a £25 gift card from them. I noticed that you can't withdraw in first 2 years.

Maybe you could outline what appeals to you from it and we can see how it meets those criteria and maybe offer alternative options?

datlex

buyhighselllow wrote: »

Endowment policy by the looks ?

masonic wrote: »

Products from Friendly Societies are often absolute rip-offs. This one seems to be one of the worst I've taken a look at.

Always look at the key features, in particular the charges and the effect of the charges on what you might get back.
http://www.scottishfriendly.co.uk/uploads/pdf/products/scottish-bond/scottish-bond-key-features.pdf

Looking at the table on page 3, in the first year, you pay in £300 and pay £300 in charges. At the end of this first year your plan is worth £0. Because of your cashback and gift cards, you get £75 back, so you've paid £300 for £75. Sounds like a great deal!

It takes the next 9 years to recover that loss (assuming the same 5% growth, which is not guaranteed), so that at the end of 10 years you get back a little more than you paid in.

Overall rate of return (including cashback and gift cards) less than 1%. That's from an investment that's estimated to grow at 5% per year, so charges are equivalent to about 4% per year.

As the key features document says, "Putting it another way, leaving out the cost of life cover,
this would have the same effect as bringing the investment growth used down from 5% to 0.5% a year." :eek:

Bargepole time!

I am guessing neither of you actually have any personal experience of the company or product. Which is what my question was...... Obvious growth is not guaranteed with any company. (It does have a minimum guarantee so you would not lose everything). Also it clearly tells you if you withdraw in first two years you will get nothing. Neither of which I was querying. I simply wanted to know whether people had invested in a longer term bond with them and how it had been. I value experience over opinion.

jimjames wrote: »

Maybe you could outline what appeals to you from it and we can see how it meets those criteria and maybe offer alternative options?

So I a guessing that you have not used the product either?

jimjames

datlex wrote: »

Has anyone had any experience of this

You asked for experience not people who had to have taken out the product. Why would I invest money in such a poor product when vastly better alternatives are available? The lack of response to the question about why you're looking at this product doesn't really enable much help.

Getting cash back is great normally but throwing money in a long term investment plan just to get a few quid back doesn't seem the most logical thing on a money saving site

masonic

datlex wrote: »

I am guessing neither of you actually have any personal experience of the company or product. Which is what my question was...... Obvious growth is not guaranteed with any company. (It does have a minimum guarantee so you would not lose everything). Also it clearly tells you if you withdraw in first two years you will get nothing. Neither of which I was querying. I simply wanted to know whether people had invested in a longer term bond with them and how it had been. I value experience over opinion.

With the greatest of respect, this site is about moneysaving and you are asking for "personal experience" of a product that is an out and out rip off. You are not going to find many people here who are going to pay the excessive premiums in order to gain "personal experience" of a product that is described by the company offering it as being expensive and having poor performance after charges.

The vast majority of people will avoid this type of "investment" at first sight. Of those who do have experience, some will be rather embarrassed to admit to it, some will have realised that they can make more money using the referral schemes these companies offer and try to promote these products to others against their best interests, and there will also be those who cannot face up to the fact that these products are poor value or admit they were mistaken to invest and will therefore have a very rose-tinted view of them.

You say that you value experience over opinion. I value facts over both of these. The facts are that, as you correctly state, your loss over 10 years is limited to £300 or about minus 0.7% per year, with a typical return being 0.5% per year, and even in the case of very high performance of the investment you could only expect growth of 1.5% per year (using information from the provider). That compares very unfavourably to a cash regular savings account where you may be guaranteed a return of 5%.

If you wish to look for a few anecdotes to convince yourself otherwise, then that is of course your prerogative.

datlex

My definition of experience of a product is clearly different to other people. My definition of experience of a product is having used that product. This differs from an opinion of a product. With regards to cashback I would never take out or buy a product due to cashback. I would however take advantage of cashback on a product if it seemed like a good deal. I value people's experience of a product i.e. how they have performed for them. How helpful the company is etc.

coyrls

http://www.telegraph.co.uk/finance/personalfinance/investing/isas/10962097/With-profit-funds-try-to-make-a-comeback-on-launch-of-new-Isas.html

“There are so many negative aspects of this new product it’s hard to know where to start,” said Patrick Connolly, an experienced financial adviser at Chase de Vere

“High commissions and free gifts are the sorts of features that generally spell a poor deal for investors and we thought we had seen the last of them,”

Sceptic001

datlex wrote: »

My definition of experience of a product is clearly different to other people. My definition of experience of a product is having used that product. This differs from an opinion of a product.

I once had an ingrowing toenail. The hospital staff who sorted me out were fantastic. I would recommend an ingrowing toenail to anyone.

masonic

datlex wrote: »

I value people's experience of a product i.e. how they have performed for them. How helpful the company is etc.

Here are a few experiences to start you off:

https://forums.moneysavingexpert.com/discussion/comment/19390855#Comment_19390855

Gorgeous George: "Mine had a surrender value of £2,744.82 on 1 Jul 08. Today it is £2,580.98 despite having paid in £200 more." (i.e. it has dropped to the basic guaranteed level, based on this earlier post)
Annual return: Probably negative

soo05: "Just got my cheque today... after putting in £25 a month over the last 10 years, I have made a whopping 98p profit! Very disappointed. Had no idea when I took this out just how bad it was."
Annual return: ~0.0%

Marsie: "That's better than me then - I've just had maturity notices for two policies, and both will pay out LESS than I have paid in over 10 years. A lesson well learnt ... thankfully both were 'only' £10/month."
Annual return: Negative

Ampthill Ram: "Well, just found out that it has returned a 1.3% return on investment. Useless!! £1,800 invested at £15 per month over 10 years. £120 interest paid. And they have the cheek to ask you if you want to invest in an another Scottish Bond! Jokers!"
Annual return: ~1.2%

GetRealBabe: "Like the other posters I've learned the hard way. Mine matures in May and am not hopeful. Never again."

EC12345: "My policy matures in September. Been paying £20 over the last ten years so a total of £2,400 - found out that I will be getting £2,604 - so not bad but could be better - at least I did not lose any like some poor people I have read about."
Annual return: ~1.6%

vulcan59: "I had a £25 per month 10 year Scottish Friendly bond mature about a month ago. You should get a letter from them fairly soon telling you the maturity value and giving you the option of cashing in or continuing to make contributions. I paid in £3000 over 10 years and received £3436. Not a brilliant return but not the disaster I was expecting."
Annual return: ~2.6%