Santander Stockmarket linked savings bond.

badger09

Terry_Towelling wrote: »

Much depends on the way the market performs over the next 6 years - which nobody can know. Much also depends on whether the bond offers any safeguards against losses and how it protects any gains and just how much of those gains it will return to you.

If the need is for safety and a good return combined, they could just stick the whole £48K into a Paragon 5 year fixed rate account offering 2.66% pa. That will give about £54.5K after only 5 years (if you leave the interest in to compound) with no risk whatsoever. There's probably not a lot in it but, for guarantees, a savings account is probably best for them.

Obviously we don't know what will happen to interest rates over the next 5 years either, so locking away for that length of time might, or might not, be a good thing - but it is safe and pretty certain.

No info given, but tax could reduce the return that £54.5k

dunstonh

Hi, is it worth re investing money from a matured santander stockmarket linked savings bond, into another one with santander?

Was that one of their deposit versions or a structured capital at risk product (SCARP)? I didnt think Santander offered either of them anymore after they got into trouble with them some years back. If they are, what are the terms and who is the market counterparty?

Terry_Towelling

badger09 wrote: »

No info given, but tax could reduce the return that £54.5k

Quite right and fair point - all depends on OPs other income as to how much interest income can be had tax-free - and certainly you'd want the interest on a 5-year bond to be paid monthly or annually - not on maturity, as that would certainly be a big hit on interest in a single tax year.

I suppose because the Santander bond was a capital investment it wouldn't have been liable to income tax but CGT instead (if it gained more than the annual exemption - which it didn't). I did have a brief look to see if there was a 5-year ISA that could take some of it this year and some next but only Charter Savings came close with 2.31%.

I guess it is a case of doing the sums, working out your attitude towards the uncertainty of the market and then plumping. We still don't know what the Santander Bond terms were to know what might suit best.

dunstonh

I suppose because the Santander bond was a capital investment it wouldn't have been liable to income tax but CGT instead (if it gained more than the annual exemption - which it didn't). I did have a brief look to see if there was a 5-year ISA that could take some of it this year and some next but only Charter Savings came close with 2.31%.

Over time, SCARPs have been available unwrapped, within an ISA and via the life assurance wrappers and pensions. So, tax would vary depending on method it was held.

Cornishkatie

The maturing bond is " stockmarket linked savings bond" (issue 21) .
The letter from santander asks if all or part the money would like to be re invested into The santander stockmarket linked savings bond (issue 86). 6 year term.
( or transferred into their santander account who they bank with)
They are a pensioner.
I wanted to help.
Its harder than i thought!!!!