norwich union with profits guaranteed

littleD

has anyone had any experience of or considering Norwich Union with profits guaranteed bond?

dunstonh

Yes I have experience of it and still have some clients invested in it.

I would consider it a niche fund with some advantages. I wouldnt dream of using it for my own money but it can be suitable for some. What is noticeable is that I have described it to clients a number of times recently as an option but priced it up against alternatives (using same sector allocation or even lower risk allocations) and described pros and cons and in every case the client has agreed that the alternatives are better value. In most cases not taking the guarantee but treating the lower cost over 5 years as a buffer along with not going heavy into stockmarket.

littleD

Thanks for the reply Dunstonh, I contacted West Brom Building Society as we have just recieved a pension payout of 20K and we were looking for somewhere to put the money, we want a "safe" account but would obviously like to get some returns from this money. West Brom suggested the Guarnateed with Profits option from Norwich Union but I must admit I had reservations about it (don't know why, maybe the 5 year term). Any suggestions/comments as to what might be the better option would be appreciated. Thinking about filling up ISAs to the max first, pretty sure about that one, but what then? Thanks in anticipation.

dunstonh

Never get your advice from a bank. That is your first problem.

I must admit I had reservations about it (don't know why, maybe the 5 year term).

all investment options are going to be at least 5 years so that isnt going to change.

What do you want from your money?

littleD

Sorry for not replying been away from computer for a day or two!

What would we like from our money, well after years of being on a tight budget, we now have around 22K in a basic savings account in the Royal Bank of Scotland. I don't want it to stay in there as the interest rate is terrible, so after filling up this years ISA and next years ISA we could use an account that is safe and gives a decent interest rate, we want the security of having some money there if we need it but if we don't it would be nice to be earning a bit from it. Any suggestions would be helpful, we've never had this problem/issue before because we've never had any spare cash.

dunstonh

Any suggestions would be helpful

Its difficult to suggest where you should look as we dont know a lot about you. However, you have a relatively small amount (in the scheme of things) and would be new to investing (based on what you have said). You could consider drip feeding into the ISA and picking a spread of funds that matches your risk profile (which appears to be cautious based on the very limited info). That way you dont go in all in one go and you get to dip your toes into the water gradually.

littleD

Thanks again for the reply! Basically you're looking at a couple with who both have modest income per week (enough to pay the bills, food shop household stuff etc) no mortgage and have now just come into around 20K. We don't need this money to supplement our day to day living, but having gone without or should I say "skrimped" most of our life would like to know that this 20k is tucked up safely but earning the best it can for us (cautious is an understatement for me). Don't mind it tied up for a while but the 5 year term with West Brom made it feel out of my reach, would like a year term maybe, then move to another year term and so on (said I was cautious!!) inititally we will fill up ISA's to the max which will let me put £3,000 this year and £3,600 next tax year I believe, my husband has put money into this years ISA so he can only put a small amount in this year and then more in next year, so let's say this ties up 10k leaving around 10k to put into savings, I've been looking at fixed rate savings, what do you think of this idea or do you have any suggestions for any other path to go down, sorry lot's of questions, very novice saver here. thanks