Stocks and shares ISA

Ellifain44

Hi I am after a bit of advice.  I have a stocks and shares ISA with Shepherd's Friendly.  We recently wanted the money for a deposit on a house but they came back to me and said that because of the current crisis they would charge a Market Value Reduction and we would only get £4020 from our £20100 investment.  They advised they would apply this until further notice.  If I opened a cash ISA would I be able to transfer all the money without incurring any charges?

masonic

Unfortunately, you've learned the hard way that investment products bought from Friendly Societies have a sting in the tail. They are also generally high cost and poor quality products. In many cases you need to commit the money for a period of time and face heavy penalties if you need to access the money early.

That said, what's done is done. In answer to your question, the Market Value Reduction would be applied regardless of how you exited the investment, so yes you could transfer to a cash ISA, but the sum transferred would be £4,020 (edit: based on grumiofoundation's post below, it looks far more likely the actual figure is £16080). Given that stockmarkets and most other asset classes have recovered significantly since the recent crash (and one would hope their investment fund didn't fall anywhere close to 80% at the worst point), I'm quite shocked at the magnitude of the MVR, is there an early access penalty included in that?

grumiofoundation

Ellifain44 said:

Hi I am after a bit of advice.  I have a stocks and shares ISA with Shepherd's Friendly.  We recently wanted the money for a deposit on a house but they came back to me and said that because of the current crisis they would charge a Market Value Reduction and we would only get £4020 from our £20100 investment.  They advised they would apply this until further notice.  If I opened a cash ISA would I be able to transfer all the money without incurring any charges?

Are you sure it is not you would get £16080 from £20100. This thread from a month or so ago talks about a 20% MVR whereas you are talking about a 80% one!

https://forums.moneysavingexpert.com/discussion/6126934/shepherds-friendly-mvr-warning

Ellifain44

The email I got said that the MVR is £16080 the balance I would receive would be £4020.  I guess I am gonna have to leave it until the pandemic is over.

Albermarle

Ellifain44 said:

The email I got said that the MVR is £16080 the balance I would receive would be £4020.  I guess I am gonna have to leave it until the pandemic is over.

This hardly seems possible . Most investments have recovered most of their recent losses, so even an MVR of £4020 seems high.
You should double check it is not a mistake. 

Ellifain44

I am no longer in desperate need to access the money so can leave it there for a while, but I will contact them by phone and get the correct amount.  As you say it seems pretty steep.  We did close one that had £20k in it and they took £1000 off it, it was at the same time as the Shepherds Friendly one.