Moneybuilder - should I cash in

AnotherJoe

Arlene_Robertson wrote: »

Thank you all for your contribution which is most helpful. I am still gathering the pieces of my jigs and its good to get help making it so comments much appreciated ! I guess my final question is this. If I cash in 2 years earlier than the full 30 years is there a way of avoiding paying tax as I understand I won't pay tax if i wait till maturity (just would like the lump sum now).

Yes. Take a loan now, then pay it off in 2 years time when the policy pays out.
You'll have to pay interest on the loan for the 2 years of course.

Arlene_Robertson

Thank you all again. Where would be a good place for a low interest loan ?

xylophone

No I did not get tax relief on this savings at all

See

https://www.lv.com/contact-us/heritage-policies/lapr



As LAPR provided income tax relief of 12.5%, if an annual premium was £100 the policyholder would pay £87.50 and we would claim £12.50 from HMRC.
Are all policies taken out before March 1984 affected?

No, mainly only eligible qualifying life assurance policies taken out before 14 March 1984 were entitled to receive LAPR. There were special rules for RNPFN Moneybuilder so contracts taken out before and after March 1984 attracted LAPR. This is often only in relation to the first £100 of the yearly premium – maximum relief of £12.50. Customers could lose eligibility to benefit from LAPR if they moved aboard. LAPR will be stopped on premiums paid from 6 April 2015. We’ll be writing to affected policyholders to let them know the increase in the premium they’ll pay.
Are RNPFN Moneybuilder policies treated differently?

Separate legislation applied to RNPFN Moneybuilder policies. Broadly speaking, most Moneybuilder policies issued from 1985 benefitted from LAPR on the first £100 of the yearly premium. This meant we could reclaim £12.50 of each yearly premium from HMRC. Older Moneybuilder policies benefitted from LAPR on 12.5% of their whole premiums. Customers could lose eligibility to benefit from LAPR if they moved aboard.
LAPR for all Moneybuilder policies will be stopped on premiums paid from 6 April 2015. We’ll be writing to the affected Moneybuilder policyholders to let them know the increased premium they will need to pay.




In your position I think I would write to LV asking for confirmation as to "qualifying/non qualifying" status.

I would also ask for the surrender value if taken early and confirmation of the tax position on early surrender.

AnotherJoe

Arlene_Robertson wrote: »

Thank you all again. Where would be a good place for a low interest loan ?

Wow thats a tough one. If only there was a website, lets say it was called, I dont know, Money Saving Expert, which on its website, and on the banner on top of every page, a had a link to examples of the best places for loans.