Friendly society tax exempt savings plan - still worth the trouble?

Old_Lifer

Rates of return reached a peak in the early 1990's when if I remember correctly,    the best  10 year  friendly society  policies had returns of  13.5 - 13.75 per cent,   this was only slightly lower than the top performing 10 year endowments  which had returns of nearly 13 percent.   

Life  Assurance Premium Relief  (LAPR)  was abolished  for new policies in 1984  but continued for existing policies.       In  the month before the change,  there was a mad rush to take-out 10 year policies  (the minimum payment term for a Qualifying Policy) and large numbers of these policies were sold  in a scramble to  take-out these policies before the  change .    After 1994  these policies would have matured  and thereafter the lack of tax relief and  cuts in bonus rates year after year ( for years ahead)   resulted in lower and lower rates of return.

HardCoreProgrammer2

I finally got the cheque in the post yesterday, after chasing for nearly 3 weeks.
It was just under 3.7% annualised growth, according to https://www.thisismoney.co.uk/money/saving/article-1633419/Monthly-lump-sum-savings-calculator.html. I have not included the £50 (I think) in M&S vouchers.
I suppose that if the scheme was not tax free, then the returns could be even lower.
Yes, I could have done better, but 20 years ago I knew nothing about investments and was not aware of the pitfalls with "with profits" funds.
For now, the £25 will be going into some vanguard fund. I won't bother about friendly societies again, despite the mutuality and tax free status.

HardCoreProgrammer2

Reaper said:

HardCoreProgrammer2 said:

The maturity date will be soon and there is no option to continue.

Just double check that is correct. Usually even if you don't continue paying premiums it can continue "paid up". I still have a small one (with a different Friendly Society) from decades ago which I never got round to surrendering as the charges were much less once the 10 year premium paying period ended.

Yes, this is correct. They said that the policy cannot be extended or made "paid up".
Out of interest, could I ask which friendly society it is, and how long you have been paying into it?

Most of the money will go towards bills and essential repairs - £8xxx does not go far with them.