What to do with mature PEPS & NS & I Savings

GillyFlower

My husband and I are both retired and in our 60's. I have been diagnosed with Breast Cancer last year and obvioulsy want to enjoy our savings but at the same time be careful. We have no other pensions except our State Pensions.

We do not have a Mortgage and therefore at the end of the day can always down size but we love living where we are. We do have ISA's etc. The time has come to review several of our saving 'pots'.

We have three AXA PEPS that have been going for about ten years.

1. AXA UK Investment ICVC Distrubution Class R - Accumulation Shares. = £9k
2. AXA UK Investment ICVC Distribution Class R - Income Shares = £7.5K
3. AXA UK Investment ICVC UK Growth Class R - Accumulation Shares = £7.5k

With Prudential -

1. Managed Trust - Accumulation - £10K

With NS & I

Matured on 7 March 2007 a 5 Year inflation - beating Index Linked Savings Certificate = £15k

This nows goes onto Inflation Proofing + 0.70% 1st Year, 2nd Year + 0.90%, etc.

We have been advised that we could -

1. Have all the AXA funds converted so they become Income Shares and draw a quarterly income from them.
2. Take out the NS & I funds and convert them into ISA's for this year.
3. We have about 8K coming in in December which could be used for next year's ISA's. £7,200 each.

What we need and how we see our current situation -

1. To feel we are trying to keep above inflation.
2. To be able to get to our money if we need it.
3. Everyday living expenses - we do live quite simply and do not entertain, go out for meals, etc. So we manage.

Any thoughts please?

dunstonh

The advice seems reasonable based on generics. However, if its an AXA tied sales rep you are seeing then you should disregard the advice specifically and switch to an IFA as the income yields on AXAs funds are not the best. You may prefer a higher yielding fund spread with a big of diversifcation than a bog standard distribution fund (not a bad one but you can improve on the yields).

Do you have enough cash funds (savings accounts for example) to meet you capital needs?

martinman3

I am sorry to hear of your predicament and my thoughts are with you.

Concerning the NS&I Index Linked certificates, were they re-invested in the 41st issue ?

My personal opinion is that there is very little to be gained by cashing in these certificates to put elsewhere as they provide protection against inflation and you have instant access to them. You may or may not know that you can cash in only some of them if you wish with interest paid up to the date cashed in and no catches. The big advantage that re-invested certificates have over new ones is that new ones cashed in for the first 12 months pay no interest.

GillyFlower

Thank you for your thoughts. Sorry I haven't got back sooner had some treatment yesterday.

The NS & I was originally a 9th Index-Linked Issue taken out in March 97. I think it is my 'Chemo brain' that has caused me a little confusion.

The letter I had in Feb 2007 said 'Your 5-Year inflation - beating Index Linked Savings Cert is about to reach the end of it's investment term' in March 2007.

The letter went onto to say that the good news was I could continue to earn tax free interest for a further term of the same length.

Year 1 - Inflation Proofing + 0.70%, Year 2 + 0.90%, Year 3 + 1.10%, Year 4 + 1.30% and Year 5 + 1.51%.

I have just checked and the 9th Index-linked Issue Certificate has the same Certificate Number as that shown on the above letter. Does that make sense.

All I know is I am a little concerned about taking this out and investing into two B & M ISA's this year without fully understanding the implications. The agent said it is about keeping up with CPI. I thought I was with Inflation Proofing but I think he said CPI was different.

He is ringing this morning to arrange a further appointment but I think I need more time.

Thanks

dunstonh

Why are you seeking advice from a sales rep and not a proper financial adviser?

From next year sales reps wont be able to give financial advice anyway but make it clear they are salespeople. You need products and advice from the whole of market and not AXA.

martinman3

Year 1 - Inflation Proofing + 0.70%, Year 2 + 0.90%, Year 3 + 1.10%, Year 4 + 1.30% and Year 5 + 1.51%.

Those rates correspond to the 41st Issue which averages RPI+1.1% each year. The latest 44th issue came out in the last few days and pays RPI+0.7% each year.

It does seem that the salesman is giving bad advice in order to sell his own products. The part about CPI proves that you are correct and he is talking rubbish.

As dunstonh says you must talk to an Independent Financial Adviser not this representative. Forum rules prevent him giving his opinion of AXA or suggesting this himself but why not send a private message to dunstonh and he will point you in the right direction.
To do this click on his user name on the left and then "Send a private message"

GillyFlower

Thank you Martinman3

I have been busy with hospital apps and computer problems.

I am getting a better list of our savings uptogether and will see if Dunstonh can give me any tips.

Gilly

GillyFlower

Dunstonh

Can you please tell me anything about choosing Indpendent Financial Advisors and their fees.

Many thanks

GillyFlower

My first posting last year included the info below that I have highlighted in purple.

Once again ill health and treatment has brought on a lull and nothing has been done regarding these accounts.

The situation has changed in so much as everything below has and still is plummeting in value.

Our thoughts are cash it all in now and just invest in Savings Accounts and to then monitor and swop around. My husband was 65 in December so that means his tax allowances have increased.

Have any of you just cashed in and run with it?

Gilly

We have three AXA PEPS that have been going for about ten years.

1. AXA UK Investment ICVC Distrubution Class R - Accumulation Shares. = £9k
2. AXA UK Investment ICVC Distribution Class R - Income Shares = £7.5K
3. AXA UK Investment ICVC UK Growth Class R - Accumulation Shares = £7.5k

With Prudential -

1. Managed Trust - Accumulation - £10K

Note: All values have gone down by several thousand.

dunstonh

The situation has changed in so much as everything below has and still is plummeting in value.

The markets are nearly 20% up on their low point. Why is yours still going down?

Have any of you just cashed in and run with it?

No.

We have three AXA PEPS that have been going for about ten years.

What did you do in the last market crash (which was on a similar scale to this one)? One assumes you did nothing as it was 8 years ago and you said you invested 10 years ago. So, you just went straight through it and came out the other side. What is different this time round?

Artytarty

Do you really need it spelled out to you, Dunstonh?
Gilly has refered to her cancer diagnosis, treatment and continuing health problems.
It s not unreasonable that she would now like to get some pleasure from her invesments!
Things do change, we get older ( we hope).
Arty.