Insurance on saving scheme

rosturra

I have a saving scheme, in which I paid into for 10 years. I have left it dormant since completion, so it's not cashed out.

I was sold scheme by some financial advisor. Called a "Select Investment plan", I took it out in 1994, when I was 29.
Now my sole requirements were a saving scheme for investment purposes only. I had no need for life insurance. I was single, had no mortgage at the time, I was permanently employed with a good job, on £30,000, with a pension scheme which had a 3 x salary death benefit.

I ended up with a scheme with a life assurance element. I don't remember it ever being discussed. Just that I this would have no tax liability.

With all the PPI in the news. I now realise that I was probably sold such a scheme., as the commission on the life insurance element was lucrative.

So back in June I complained. Fund currently with Reassure (Not opriginal company they took over the fund folllowing a merge/takeover). This was investgated and turned it down. As "the life cover associated with the policy was made clear at the point of sale".

"At the time of the plan, we made every effort to ensure that you understood the nature of the plan. you would have been given a brochure outlining the benefits, features and conditions of the plan"

Interestingly they quoted my records which say: "You were aged 29, single , no dependants. Employed, higher rate tax payer. You wanted a long term savings policy to provide capital in the future" So nothing on my notes to indicate that I required life assurance.

The actual value of the fund? I don't have figures to hand but even now is less than £10,000. So funds probably would not even have attracted CGT as profits under threshold. And surely even in 1995 there were ISAs or TESSAs, in which I would not need life assurance to get a tax break.

Any advice on whether it is worth progressing this?

[Deleted User]

rosturra wrote: »

Any advice on whether it is worth progressing this?

Your complaint is already rejected and is pre-regulation (2005) so you can't refer it to the Ombudsman. However, I can't see anything compelling about your concerns which might sway FOS to side with you anyway.

Note that Life Insurance is not PPI (and not even all PPI was mis-sold).

antrobus

rosturra wrote: »

...
I was sold scheme by some financial advisor. ...

Your complaint should therefore be addressed to said financial advisor.

P.S. What loss have you suffered? You have £10,000 or whatever.

dunstonh

I ended up with a scheme with a life assurance element. I don't

remember it ever being discussed. Just that I this would have no tax liability.

The life assurance tax wrapper is one of a number available for investments. Very common and quite normal in the 90s.

With all the PPI in the news. I now realise that I was probably sold such a scheme., as the commission on the life insurance element was lucrative.

No you were not. PPI has nothing to do with a regular savings scheme using the life assurance wrapper.

Any advice on whether it is worth progressing this?

There is no complaint here. You seem to be jumping to conclusions.

Until around 1995-1998, the life assurance wrapper was the most common method. Some continued to retailed until early 2000s.

These were mostly sold by insurance company agents and the premiums typically small. usually around £20-50pm.

ISAs didnt exist back then. You had PEPs but they typically needed at least £100pm as a minimum contribution and many PEPs wouldnt do monthly premiums. You could also use no tax wrapper but the tax status between unwrapped and life assurance wrapped was broadly similar (life assurance taxed internally at corporation tax rates but reliefs available vs dividends taxed)

Broadly speaking, if you used an insurance agent and not an IFA (yours appears to be insurance agent as Reassure would have told you it wasnt them if it was an IFA) you would expect a life assurance wrapper if the monthly payment was under £100pm or Unit Trust or UT PEP if over £100pm. If you used an IFA, you would expect a UT or UT PEP on anything over £20pm.

And surely even in 1995 there were ISAs or TESSAs, in which I would not need life assurance to get a tax break.

ISAs did not exist and TESSA was a cash savings scheme and not an investment scheme.

rosturra

OK. Case closed then. I am somewhat reassured to read that the life assurance wrapper was "common & normal"; although I had no real need of life assurance itself.