1% Govt levy matched on investment plan

[dublinaam]

Hi,

I have a Zurich investment plan. They will give a 101% allocation so you don't lose out on the 1% government levy. Just wondering are there other providers with a similar incentive?

 

[Duke of Marmalade]

Hi,

I have a Zurich investment plan. They will give a 101% allocation so you don't lose out on the 1% government levy. Just wondering are there other providers with a similar incentive?

That is fairly meaningless. What matters is the overall package. They may be getting the 1% back elsewhere; I am not saying they are. Extra allocations are fairly common - calling them paying the levy is just marketing.

 

[GSheehy]

The Government Levy is a charge on the investor.

When it was introduced, it was passed on to all investors. In time, the providers decided to absorb the cost and this would have reduced their margin. If you look at the most recent Key Investment Documents (KIDs) that have been issued you'll see this cost has is very own row and not having 101% allocation is a cost of 0.14% to 0.17% pa to the investor.

I would expect that this levy is now the number one lobby issue for product providers. Get it removed and margins go up. Unless, providers decide to compete and reduce their base annual management charges.

If it was removed and you had, say a regular contribution savings contract with 101% allocation, then the 101% is for the duration of the contract so the Government removing it would add 1% to every contribution you make, after the removal.

But yes, the 101% is available from other providers and you can still buy contracts with just the 100% allocation. But, as the previous poster said, pay attention to the other costs/charges too.


Gerard

www.SaveAndInvest.ie