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  • FIRST POST
    • datlex
    • By datlex 25th Feb 17, 2:37 PM
    • 1,651Posts
    • 1,548Thanks
    datlex
    Scottish Friendly Scottish Bond Tax Free Savings
    • #1
    • 25th Feb 17, 2:37 PM
    Scottish Friendly Scottish Bond Tax Free Savings 25th Feb 17 at 2:37 PM
    Has anyone had any experience of this http://www.scottishfriendly.co.uk/tax-free-investments/scottish-bond ? I noticed them on Topcashback you get 50 after 2 payments (effectively first two payments back) also you get a 25 gift card from them. I noticed that you can't withdraw in first 2 years.
Page 1
    • buyhighselllow
    • By buyhighselllow 25th Feb 17, 3:21 PM
    • 93 Posts
    • 46 Thanks
    buyhighselllow
    • #2
    • 25th Feb 17, 3:21 PM
    • #2
    • 25th Feb 17, 3:21 PM
    Endowment policy by the looks ?
    • masonic
    • By masonic 25th Feb 17, 3:52 PM
    • 9,354 Posts
    • 6,500 Thanks
    masonic
    • #3
    • 25th Feb 17, 3:52 PM
    • #3
    • 25th Feb 17, 3:52 PM
    Products from Friendly Societies are often absolute rip-offs. This one seems to be one of the worst I've taken a look at.

    Always look at the key features, in particular the charges and the effect of the charges on what you might get back.
    http://www.scottishfriendly.co.uk/uploads/pdf/products/scottish-bond/scottish-bond-key-features.pdf

    Looking at the table on page 3, in the first year, you pay in 300 and pay 300 in charges. At the end of this first year your plan is worth 0. Because of your cashback and gift cards, you get 75 back, so you've paid 300 for 75. Sounds like a great deal!

    It takes the next 9 years to recover that loss (assuming the same 5% growth, which is not guaranteed), so that at the end of 10 years you get back a little more than you paid in.

    Overall rate of return (including cashback and gift cards) less than 1%. That's from an investment that's estimated to grow at 5% per year, so charges are equivalent to about 4% per year.

    As the key features document says, "Putting it another way, leaving out the cost of life cover,
    this would have the same effect as bringing the investment growth used down from 5% to 0.5% a year."

    Bargepole time!
    Last edited by masonic; 25-02-2017 at 4:06 PM.
    • jimjames
    • By jimjames 25th Feb 17, 3:55 PM
    • 12,646 Posts
    • 11,312 Thanks
    jimjames
    • #4
    • 25th Feb 17, 3:55 PM
    • #4
    • 25th Feb 17, 3:55 PM
    Has anyone had any experience of this http://www.scottishfriendly.co.uk/tax-free-investments/scottish-bond ? I noticed them on Topcashback you get 50 after 2 payments (effectively first two payments back) also you get a 25 gift card from them. I noticed that you can't withdraw in first 2 years.
    Originally posted by datlex
    Maybe you could outline what appeals to you from it and we can see how it meets those criteria and maybe offer alternative options?
    Remember the saying: if it looks too good to be true it almost certainly is.
    • datlex
    • By datlex 26th Feb 17, 9:26 AM
    • 1,651 Posts
    • 1,548 Thanks
    datlex
    • #5
    • 26th Feb 17, 9:26 AM
    • #5
    • 26th Feb 17, 9:26 AM
    Endowment policy by the looks ?
    Originally posted by buyhighselllow
    Products from Friendly Societies are often absolute rip-offs. This one seems to be one of the worst I've taken a look at.

    Always look at the key features, in particular the charges and the effect of the charges on what you might get back.
    http://www.scottishfriendly.co.uk/uploads/pdf/products/scottish-bond/scottish-bond-key-features.pdf

    Looking at the table on page 3, in the first year, you pay in 300 and pay 300 in charges. At the end of this first year your plan is worth 0. Because of your cashback and gift cards, you get 75 back, so you've paid 300 for 75. Sounds like a great deal!

    It takes the next 9 years to recover that loss (assuming the same 5% growth, which is not guaranteed), so that at the end of 10 years you get back a little more than you paid in.

    Overall rate of return (including cashback and gift cards) less than 1%. That's from an investment that's estimated to grow at 5% per year, so charges are equivalent to about 4% per year.

    As the key features document says, "Putting it another way, leaving out the cost of life cover,
    this would have the same effect as bringing the investment growth used down from 5% to 0.5% a year."

    Bargepole time!
    Originally posted by masonic
    I am guessing neither of you actually have any personal experience of the company or product. Which is what my question was...... Obvious growth is not guaranteed with any company. (It does have a minimum guarantee so you would not lose everything). Also it clearly tells you if you withdraw in first two years you will get nothing. Neither of which I was querying. I simply wanted to know whether people had invested in a longer term bond with them and how it had been. I value experience over opinion.
    Maybe you could outline what appeals to you from it and we can see how it meets those criteria and maybe offer alternative options?
    Originally posted by jimjames
    So I a guessing that you have not used the product either?
    • jimjames
    • By jimjames 26th Feb 17, 10:09 AM
    • 12,646 Posts
    • 11,312 Thanks
    jimjames
    • #6
    • 26th Feb 17, 10:09 AM
    • #6
    • 26th Feb 17, 10:09 AM
    Has anyone had any experience of this
    Originally posted by datlex
    You asked for experience not people who had to have taken out the product. Why would I invest money in such a poor product when vastly better alternatives are available? The lack of response to the question about why you're looking at this product doesn't really enable much help.

    Getting cash back is great normally but throwing money in a long term investment plan just to get a few quid back doesn't seem the most logical thing on a money saving site
    Last edited by jimjames; 26-02-2017 at 10:11 AM.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • masonic
    • By masonic 26th Feb 17, 10:34 AM
    • 9,354 Posts
    • 6,500 Thanks
    masonic
    • #7
    • 26th Feb 17, 10:34 AM
    • #7
    • 26th Feb 17, 10:34 AM
    I am guessing neither of you actually have any personal experience of the company or product. Which is what my question was...... Obvious growth is not guaranteed with any company. (It does have a minimum guarantee so you would not lose everything). Also it clearly tells you if you withdraw in first two years you will get nothing. Neither of which I was querying. I simply wanted to know whether people had invested in a longer term bond with them and how it had been. I value experience over opinion.
    Originally posted by datlex
    With the greatest of respect, this site is about moneysaving and you are asking for "personal experience" of a product that is an out and out rip off. You are not going to find many people here who are going to pay the excessive premiums in order to gain "personal experience" of a product that is described by the company offering it as being expensive and having poor performance after charges.

    The vast majority of people will avoid this type of "investment" at first sight. Of those who do have experience, some will be rather embarrassed to admit to it, some will have realised that they can make more money using the referral schemes these companies offer and try to promote these products to others against their best interests, and there will also be those who cannot face up to the fact that these products are poor value or admit they were mistaken to invest and will therefore have a very rose-tinted view of them.

    You say that you value experience over opinion. I value facts over both of these. The facts are that, as you correctly state, your loss over 10 years is limited to 300 or about minus 0.7% per year, with a typical return being 0.5% per year, and even in the case of very high performance of the investment you could only expect growth of 1.5% per year (using information from the provider). That compares very unfavourably to a cash regular savings account where you may be guaranteed a return of 5%.

    If you wish to look for a few anecdotes to convince yourself otherwise, then that is of course your prerogative.
    Last edited by masonic; 26-02-2017 at 10:38 AM.
    • datlex
    • By datlex 26th Feb 17, 10:37 AM
    • 1,651 Posts
    • 1,548 Thanks
    datlex
    • #8
    • 26th Feb 17, 10:37 AM
    • #8
    • 26th Feb 17, 10:37 AM
    My definition of experience of a product is clearly different to other people. My definition of experience of a product is having used that product. This differs from an opinion of a product. With regards to cashback I would never take out or buy a product due to cashback. I would however take advantage of cashback on a product if it seemed like a good deal. I value people's experience of a product i.e. how they have performed for them. How helpful the company is etc.
    • coyrls
    • By coyrls 26th Feb 17, 10:43 AM
    • 992 Posts
    • 1,043 Thanks
    coyrls
    • #9
    • 26th Feb 17, 10:43 AM
    • #9
    • 26th Feb 17, 10:43 AM
    http://www.telegraph.co.uk/finance/personalfinance/investing/isas/10962097/With-profit-funds-try-to-make-a-comeback-on-launch-of-new-Isas.html

    !!!8220;There are so many negative aspects of this new product it!!!8217;s hard to know where to start,!!!8221; said Patrick Connolly, an experienced financial adviser at Chase de Vere

    !!!8220;High commissions and free gifts are the sorts of features that generally spell a poor deal for investors and we thought we had seen the last of them,!!!8221;
    • Sceptic001
    • By Sceptic001 26th Feb 17, 10:53 AM
    • 1,100 Posts
    • 853 Thanks
    Sceptic001
    My definition of experience of a product is clearly different to other people. My definition of experience of a product is having used that product. This differs from an opinion of a product.
    Originally posted by datlex
    I once had an ingrowing toenail. The hospital staff who sorted me out were fantastic. I would recommend an ingrowing toenail to anyone.
    • masonic
    • By masonic 26th Feb 17, 11:06 AM
    • 9,354 Posts
    • 6,500 Thanks
    masonic
    I value people's experience of a product i.e. how they have performed for them. How helpful the company is etc.
    Originally posted by datlex
    Here are a few experiences to start you off:

    http://forums.moneysavingexpert.com/showthread.php?p=19390855&postcount=16

    Gorgeous George: "Mine had a surrender value of 2,744.82 on 1 Jul 08. Today it is 2,580.98 despite having paid in 200 more." (i.e. it has dropped to the basic guaranteed level, based on this earlier post)
    Annual return: Probably negative

    soo05: "Just got my cheque today... after putting in 25 a month over the last 10 years, I have made a whopping 98p profit! Very disappointed. Had no idea when I took this out just how bad it was."
    Annual return: ~0.0%

    Marsie: "That's better than me then - I've just had maturity notices for two policies, and both will pay out LESS than I have paid in over 10 years. A lesson well learnt ... thankfully both were 'only' 10/month."
    Annual return: Negative

    Ampthill Ram: "Well, just found out that it has returned a 1.3% return on investment. Useless!! 1,800 invested at 15 per month over 10 years. 120 interest paid. And they have the cheek to ask you if you want to invest in an another Scottish Bond! Jokers!"
    Annual return: ~1.2%

    GetRealBabe: "Like the other posters I've learned the hard way. Mine matures in May and am not hopeful. Never again."

    EC12345: "My policy matures in September. Been paying 20 over the last ten years so a total of 2,400 - found out that I will be getting 2,604 - so not bad but could be better - at least I did not lose any like some poor people I have read about."
    Annual return: ~1.6%

    vulcan59: "I had a 25 per month 10 year Scottish Friendly bond mature about a month ago. You should get a letter from them fairly soon telling you the maturity value and giving you the option of cashing in or continuing to make contributions. I paid in 3000 over 10 years and received 3436. Not a brilliant return but not the disaster I was expecting."
    Annual return: ~2.6%
    Last edited by masonic; 26-02-2017 at 11:45 AM. Reason: To clarify return figures were annualised
    • dunstonh
    • By dunstonh 26th Feb 17, 1:16 PM
    • 92,966 Posts
    • 60,347 Thanks
    dunstonh
    My definition of experience of a product is clearly different to other people. My definition of experience of a product is having used that product. This differs from an opinion of a product. With regards to cashback I would never take out or buy a product due to cashback. I would however take advantage of cashback on a product if it seemed like a good deal. I value people's experience of a product i.e. how they have performed for them. How helpful the company is etc.
    Its an awful product that should have been killed off years ago. Compliance companies have warned that advisers recommending this type of plan are at risk of mis-sale allegations if they were to recommend them. This is why they are sold direct because there is no advice protection if you buy direct.

    The responses from the regular posters on this site are correct. Just because you do not like the answers does not make them any less correct. If you want to buy an obsolete product that works in a similar way to an endowment policy then be our guest. A fool and their money are easily parted. However, you should take on board what is being said. Modern products do not have a fixed term. They are open ended. They do not have big early exit charges (they have no exit charges). They do not use obsolete or expensive investment options.

    So, maybe it would be better if we asked you a question. Why do you want to buy an obsolete & damned expensive product which would likely be classed as a mis-sale if arranged under advice when better options exist?
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • msallen
    • By msallen 26th Feb 17, 6:09 PM
    • 840 Posts
    • 922 Thanks
    msallen
    I once had an ingrowing toenail. The hospital staff who sorted me out were fantastic. I would recommend an ingrowing toenail to anyone.
    Originally posted by Sceptic001
    Ah but did the hospital staff have personal experience of ingrowing toenails? Surely their medical knowledge was worthless without that.
    • longleggedhair
    • By longleggedhair 26th Feb 17, 7:16 PM
    • 309 Posts
    • 383 Thanks
    longleggedhair
    I might add my mother had one of these mature a few years ago and it matured at a small loss.

    Scottish Friendly are terrible. Some of the other smaller societies do have rather good track records, but I'm with everyone else, I would avoid them like the plague.
    • Conair99
    • By Conair99 13th Jan 18, 12:08 PM
    • 1 Posts
    • 0 Thanks
    Conair99
    Seems some have had a bad experience here....i set up a plan with a first payment of 25 in March 2015 and cashed in last week for 925. Considering only paid in 575 over the 23 months this seems a decent return!
    • dunstonh
    • By dunstonh 13th Jan 18, 1:13 PM
    • 92,966 Posts
    • 60,347 Thanks
    dunstonh
    Seems some have had a bad experience here....i set up a plan with a first payment of 25 in March 2015 and cashed in last week for 925. Considering only paid in 575 over the 23 months this seems a decent return!
    Originally posted by Conair99
    march 2015 to December 2017 is not 23 months. It is 34 months.

    34 months of 25 is 850.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Alexland
    • By Alexland 13th Jan 18, 1:41 PM
    • 2,547 Posts
    • 1,929 Thanks
    Alexland
    I agree - it is unlikely you will find many people with good knowledge of financial services who have experience of this product unless it was taken out when they had less understanding and made poorer choices.

    If you want lots of TopCashBack go with Moneyfarm for a higher return for a better (but still average) product.
    Last edited by Alexland; 13-01-2018 at 1:48 PM.
    • msallen
    • By msallen 13th Jan 18, 2:41 PM
    • 840 Posts
    • 922 Thanks
    msallen
    If you want lots of TopCashBack go with Moneyfarm for a higher return for a better (but still average) product.
    Originally posted by Alexland
    ...but one that you only have to keep for 3 months before cashing in.
    • planteria
    • By planteria 13th Jan 18, 2:44 PM
    • 5,000 Posts
    • 1,110 Thanks
    planteria
    i don't have any experience of Scottish Friendly either, sorry datlex.

    however, i have some investments, for various family members, with friendly societies, and some of the features are very useful imo.. but not Bonds.

    Friendly Society investment plans with guarantees that are built up with regular investments have their place, and offer some steady growth and features such as life cover. with lump sums i would rather buy funds/shares within an ISA on a platform, for example: more risk, especially the latter, but lower charges too.

    i have a small bond with LV that i've had since the early 2000s that has eventually doubled in value and that i'm inclined to hold on to, but generally lump sums under 20k i would hold within an ISA rather than a bond, and if you split between two of you, or across two tax years, that obviously can be increased to 40k.
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