Scottish Friendly Scottish Bond

zippysheep

Is it usual for the final bonus on a 10 year Scottish Bond to drop from an estimated value of £2112.34 on 19th February to £1737.80 on 1st April please? ## £2112.34 was the estimated amount payable and the amount received is £1737.80. £1800 was paid in over 10 years. Thank you

Old_Lifer

If you take a look at your policy documentation it will probably say something like  'we may pay a final bonus at the end of the term or on death within the term'     A final bonus  on a life policy is not guaranteed   and the amount can be  altered up or down at any time.

eskbanker

With all due respect, whether it's usual or not doesn't really matter - the issue here is that most investments dropped by 15-30% over that period, so anything dependent on stock markets in one form or another will have suffered significant reductions in value....

Ed-1

zippysheep said:

Is it usual for the final bonus on a 10 year Scottish Bond to drop from an estimated value of £2112.34 on 19th February to £1737.80 on 1st April please? ## £2112.34 was the estimated amount payable and the amount received is £1737.80. £1800 was paid in over 10 years. Thank you

Is this one of those Tax-Exempt Savings Plans (TESPs) where you put in up to £25 a month? Similar happened where these matured in or around the financial crisis of 2008-09:
https://www.google.com/amp/s/amp.theguardian.com/money/2009/may/02/scottish-friendly-tax-free-investment

dunstonh

Is it usual for the final bonus on a 10 year Scottish Bond to drop from an estimated value of £2112.34 on 19th February to £1737.80 on 1st April please

No.  But there is a good reason why it did.

£2112.34 was the estimated amount payable and the amount received is £1737.80.

it is not an estimate. It is a synthetic projection using regulated assumptions.

£1800 was paid in over 10 years.

It is not unusual for 10 year regular premium plans to fail to pay back more than paid in.     Especially plans like yours that were obsolete 20 years ago.  

Alexland

Sorry zippysheep this just hasn't been a good investment for you. Bad timing, high fees and insufficient derisking as the bond was approaching maturity when the crash occurred. Worse still the market has partially recovered in recent weeks since it matured and was uninvested.

Old_Lifer

Although everyone concentrates on the returns at maturity,   the high charges  often mean that  the cost of terminating  one of  these tax-free  friendly society  plans  was considerable.   The surrender value was often limited to at most,  a return of premiums paid,  meaning that a  policyholder surrendering shortly before maturity would reveive only a return of premiums.    By way of comparison,   with a typical 10 year endowment  the point at which the surrender value equaled the premiums paid would be reached after 6 or 7 years  and thereafter the surrender value would  grow increasingly more rapidly as the policy approached maturity.

ginnie20

I have a Scottish Bond that finished in Feb 2020. There are a number of irregularities in what happened next.
1.The last payment should have been January but SF continued to take money from me into March. This has since been refunded by cheque.
2. I received no correspondence whatsoever relating to the policy finishing. I tried to chased several times over the past 3 months by phone but the answerphone states a TWO HOUR WAIT each time!!! 
Eventually after several emails I received the end of policy last week (3 months overdue).
3. I sent the requested documents to cash-in the policy. They told me to do this by email but when I sent the documents first by jpg format and then by pdf format, SF replied saying they can’t read this file format.  Jpg and pdf are standard formats so I've now asked them what format they need. Still no sign of payment
They should have paid this money to me 3 months ago and it feels as if they are being deliberately obstructive to not honour the payment. Is it possible to refer to them to an authority? Do I have to write a complaint to SF or elsewhere? 
THANKS!

Old_Lifer

Normally,  the only circumstances which would result in late payment of a maturity would be either where the  policyholder has moved and not advised the new address   or where the policyholder has  delayed in completing the maturity documentation.    Simply forgetting to contact the policyholder  is something which  in my  working experience  was unheard of  and  just should not happen.  

Interest would normally be paid  for the perion from maturity to the date of payment.     Here they have also continued to collect the direct debit.

My area  of knowledge  does not include complaining and compensation .   Others on  this Board  will  have recent experience  and will be  much better placed than  me   to answer that aspect.

dunstonh

They should have paid this money to me 3 months ago and it feels as if they are being deliberately obstructive to not honour the payment.

You don't think it is more likely that they have closed their call centre due to coronavirus and are working on a skeleton staff?

Is it possible to refer to them to an authority?

No. That is not how it works.

Do I have to write a complaint to SF or elsewhere?

You write a complaint to SF.

mr_accountant

IME Scottish friendly are generally terrible, I helped a family member with the surrender of an investment Bond invested in 2000 (with mgm, initially) in that time all they received was a yearly price on the value of each unit on that particular day, It's like vanguard sending a 1 line letter of the value of unit on the first of 1/6/19 once a year, absolutely useless information (especially as by the time they received the letter it was July!) 

There was nothing about what their options were, what it was invested in or costs or anything like that.
Then when they wanted to surrender the policy (was this the best option, who knows there was no info from SF) they took a few weeks to send cheque in which time the value had come down by few hundred pounds

To this day no letter confirmation letter to say account was closed absolutely nothing to this day, quite shocking service really.
In 20 years it doubled in value which I don't really know if its good or not, as no idea where it was invested or costs or options for the customer.