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  • FIRST POST
    • MSE Megan F
    • By MSE Megan F 7th Nov 18, 5:18 PM
    • 370Posts
    • 177Thanks
    MSE Megan F
    Unity Mutual launches new type of Lifetime ISA - MSE News
    • #1
    • 7th Nov 18, 5:18 PM
    Unity Mutual launches new type of Lifetime ISA - MSE News 7th Nov 18 at 5:18 PM
    Unity Mutual has launched a new type of stocks and shares Lifetime ISA, offering a guaranteed 1.25% interest rate until April, as well as a 25% Government bonus towards your first home or retirement - here's what to watch out for...
    Read the full story:
    'Unity Mutual launches new type of Lifetime ISA'

    Click reply below to discuss. If you havenít already, join the forum to reply.
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Page 1
    • Alexland
    • By Alexland 7th Nov 18, 6:41 PM
    • 3,633 Posts
    • 2,970 Thanks
    Alexland
    • #2
    • 7th Nov 18, 6:41 PM
    • #2
    • 7th Nov 18, 6:41 PM
    I guess getting a guaranteed interest rate each tax year based on expected property rental yields is reasonably attractive and this is now the best paying guaranteed return LISA in the market.

    Someone I know at work is buying a property and cashing in their Share Centre S&S LISA with a small investment loss - at the time last year I did mention that S&S is not suitable for short term so my conscience is clear.

    Alex
    • short butt sweet
    • By short butt sweet 7th Nov 18, 7:22 PM
    • 123 Posts
    • 86 Thanks
    short butt sweet
    • #3
    • 7th Nov 18, 7:22 PM
    • #3
    • 7th Nov 18, 7:22 PM
    how safe is this? i'm not sure.

    unity mutual guarantee a 1.25% return (until 5 april 2019, after which they'll tell you what level of return they're guaranteeing for the next year).

    but a guarantee is only as good as the person who makes it. what if they are unable to honour that guarantee? they say it is covered by the FSCS - as an investment product, not as a deposit - and you "may" be entitle to compensation. but is this the kind of thing the FSCS actually covers, or it is a normal loss on an at-risk investment, which wouldn't be covered?

    apart from that guarantee from unity mutual, they say that "the Account will hold a Unity Mutual life policy, which invests in a Unity Mutual Property Saver Fund". they also say that the underlying investments can include "cash, government bonds, corporate bonds, equities, property and other assets that we might deem appropriate from time to time". those underlying investments could lose money, so unity mutual's guarantee (and whether the FSCS would really back it up) does matter.
    • masonic
    • By masonic 7th Nov 18, 8:00 PM
    • 10,134 Posts
    • 7,423 Thanks
    masonic
    • #4
    • 7th Nov 18, 8:00 PM
    • #4
    • 7th Nov 18, 8:00 PM
    but a guarantee is only as good as the person who makes it. what if they are unable to honour that guarantee? they say it is covered by the FSCS - as an investment product, not as a deposit - and you "may" be entitle to compensation. but is this the kind of thing the FSCS actually covers, or it is a normal loss on an at-risk investment, which wouldn't be covered?

    apart from that guarantee from unity mutual, they say that "the Account will hold a Unity Mutual life policy, which invests in a Unity Mutual Property Saver Fund". they also say that the underlying investments can include "cash, government bonds, corporate bonds, equities, property and other assets that we might deem appropriate from time to time". those underlying investments could lose money, so unity mutual's guarantee (and whether the FSCS would really back it up) does matter.
    Originally posted by short butt sweet
    At face value, it would appear Unity Mutual has an obligation to repay your capital and this can be satisfied through FSCS compensation. It needs some due diligence though, as this is an unusual arrangement. This appears to be an investment life policy, which has unlimited FSCS protection within a SIPP, but there is currently no available information on the FSCS website as to what protections would be in place if this product was held within a LISA.

    It is a shame that the first thing that came to mind when I saw "Unity Mutual" was "DotComUnity", the twice failed credit union who had a market-leading ISA product before becoming insolvent and locking up savers' money for several months while the PRA took enforcement action and decided what to do with it. No connection with this firm, I'm sure, but it would be rather inconvenient if history repeated with a product where inability to make a time-sensitive withdrawal might cost a FTB dearly.
    Last edited by masonic; 07-11-2018 at 8:06 PM.
    • Wildsound
    • By Wildsound 7th Nov 18, 9:42 PM
    • 207 Posts
    • 137 Thanks
    Wildsound
    • #5
    • 7th Nov 18, 9:42 PM
    • #5
    • 7th Nov 18, 9:42 PM
    Brilliant, an already complex product made more complex. Just what the market needs!
    • Alexland
    • By Alexland 7th Nov 18, 9:55 PM
    • 3,633 Posts
    • 2,970 Thanks
    Alexland
    • #6
    • 7th Nov 18, 9:55 PM
    • #6
    • 7th Nov 18, 9:55 PM
    Brilliant, an already complex product made more complex. Just what the market needs!
    Originally posted by Wildsound
    I am waiting for the LISA where you can only make a penalty free withdrawal using a Nokia 3210.
    • Herbalus
    • By Herbalus 7th Nov 18, 11:02 PM
    • 2,143 Posts
    • 1,782 Thanks
    Herbalus
    • #7
    • 7th Nov 18, 11:02 PM
    • #7
    • 7th Nov 18, 11:02 PM
    This is an unusual product.

    You can ignore the behind-the-scenes investments as if they guarantee 1.25% plus return of capital (so long as they can fulfil that) then that's all that matters to the end user. But if they invest your savings and then the stock market plummets they will be looking at a loss.

    Potentially not wise from the company's point of view which makes me uneasy.
    • aj23
    • By aj23 8th Nov 18, 9:01 AM
    • 852 Posts
    • 275 Thanks
    aj23
    • #8
    • 8th Nov 18, 9:01 AM
    • #8
    • 8th Nov 18, 9:01 AM
    Worth sticking with Skipton then?
    • Alexland
    • By Alexland 8th Nov 18, 9:35 PM
    • 3,633 Posts
    • 2,970 Thanks
    Alexland
    • #9
    • 8th Nov 18, 9:35 PM
    • #9
    • 8th Nov 18, 9:35 PM
    Worth sticking with Skipton then?
    Originally posted by aj23
    These interest rate differences are so marginal that it's not worth the effort transfering an existing cash LISA even if the new provider is accepting transfers. Skipton seem competent at managing the product and when buying property the value of working with people that are clued up should not be underestimated.

    Alex
    • aj23
    • By aj23 9th Nov 18, 1:08 PM
    • 852 Posts
    • 275 Thanks
    aj23
    These interest rate differences are so marginal that it's not worth the effort transfering an existing cash LISA even if the new provider is accepting transfers. Skipton seem competent at managing the product and when buying property the value of working with people that are clued up should not be underestimated.

    Alex
    Originally posted by Alexland

    On my balance it's worth an extra £40 as it stands. I meant more with it being an investment rather than a holding. I won't switch it though.
    • masonic
    • By masonic 9th Nov 18, 6:20 PM
    • 10,134 Posts
    • 7,423 Thanks
    masonic
    I meant more with it being an investment rather than a holding.
    Originally posted by aj23
    IMHO this is a big red flag. It's not clear at all what the process and timescales would be if the underlying investments went south and the counterparty (Unity Mutual) struggled to meet its obligations.
    • cjv
    • By cjv 10th Nov 18, 7:10 PM
    • 318 Posts
    • 155 Thanks
    cjv
    I guess getting a guaranteed interest rate each tax year based on expected property rental yields is reasonably attractive and this is now the best paying guaranteed return LISA in the market.

    Someone I know at work is buying a property and cashing in their Share Centre S&S LISA with a small investment loss - at the time last year I did mention that S&S is not suitable for short term so my conscience is clear.

    Alex
    Originally posted by Alexland
    When the timescale to purchase a property changed for me, it was yours and other peoples posts on these forums that gave me the knowledge to quickly switch it from Nutmeg to Skipton while I was still ahead with a small gain.

    Some of us do listen! thanks

    If everything goes to plan I will be using it for my deposit in the next month or so
    Last edited by cjv; 10-11-2018 at 7:13 PM.
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