Traded Endowment Policies - worth buying?
Discussion
I've got a sum of money doing very little, and had thought about buying a couple of endowment policies. All the information on the web seems to be biased towards people selling them. I've got one of my own which matures in a couple of years, and quite like the idea of buying some that mature every couple of years thereafter.
Or I could just stick the lot into NS&I, and hope for a few wins over the years. The liquidity of premium bonds appeals, but there is apparently a market for TEPs, which may make this aspect less important.
Anybody got any experience of TEPs?
Or I could just stick the lot into NS&I, and hope for a few wins over the years. The liquidity of premium bonds appeals, but there is apparently a market for TEPs, which may make this aspect less important.
Anybody got any experience of TEPs?
I purchased three of these policies from a neighbour / friend back in 2004, a couple have matured, and one is 20 months from maturity. On reflection they were a good business buy.
The original policies were in companies taken over several times, but at maturity were held by Aviva, so when Aviva, a few years ago admitted to have an excess of reserves these policies qualified to receive paid out cash bonuses before maturity. These payments covered about half of the remaining annual premiums still outstanding.
The gamble is what level of terminal bonus will be paid at maturity x years ahead, in my own
case I was more than pleased.
What I have heard is that only policies with the largest established companies ie Aviva or the Prudenial have much of a market, were you to want to cash up a some stage.
Talking to someone in financial services a few months back, he said the traded EPs were not attractive as they were, but for what reason I just cannot remember.
As for premium bonds, the overall rate paid is pitiful since it was cut severely a while ago.
I was surprised to read that there were approx 300,000 individuals with max of £30,0000, so
there are a hell of lot of bonds out there! My maximum holding yielded approx 1.75-2% before I called it a day! They are probably right thing for grand parents to give to their grandchildren, ie forgotten about without expecting too much.
The banks will sell you bonds with maturity guarantees but they have high penalties for early withdrawal, and the agents ie someone on the bank staff that gets you to sign on the dotted line picks a very hefty commission, something like 2.5%.
Investment trusts through the stock exchange look at present to be the area I would look to for future investments
I hope this is of some help to you.
The original policies were in companies taken over several times, but at maturity were held by Aviva, so when Aviva, a few years ago admitted to have an excess of reserves these policies qualified to receive paid out cash bonuses before maturity. These payments covered about half of the remaining annual premiums still outstanding.
The gamble is what level of terminal bonus will be paid at maturity x years ahead, in my own
case I was more than pleased.
What I have heard is that only policies with the largest established companies ie Aviva or the Prudenial have much of a market, were you to want to cash up a some stage.
Talking to someone in financial services a few months back, he said the traded EPs were not attractive as they were, but for what reason I just cannot remember.
As for premium bonds, the overall rate paid is pitiful since it was cut severely a while ago.
I was surprised to read that there were approx 300,000 individuals with max of £30,0000, so
there are a hell of lot of bonds out there! My maximum holding yielded approx 1.75-2% before I called it a day! They are probably right thing for grand parents to give to their grandchildren, ie forgotten about without expecting too much.
The banks will sell you bonds with maturity guarantees but they have high penalties for early withdrawal, and the agents ie someone on the bank staff that gets you to sign on the dotted line picks a very hefty commission, something like 2.5%.
Investment trusts through the stock exchange look at present to be the area I would look to for future investments
I hope this is of some help to you.
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