Acorn monthly savings

[Paul O Mahoney]

As much as I love my wife she can throw a speed wobble from time to time. She quite rightly wants to save a regular monthly amount €300 over a 10 year period.
Her sister had started saving with Acorn a few years ago and was/is really happy with her "returns" so far.

My wife has maximised AVC this year and plans to do so from now to at least 62, 5 yrs from now, her pensions are in good shape, value wise.

Once she gave me the information sheet I said this looks weird. The monthly premiums increased 5% annually, fees out did fund returns for the first 6 yrs and the information showed a fund value after fees and taxation.

I thought tax was deducted from year 8, but I might be reading it wrong but surely tax isn't accrued and if it was accrued that would reduce the fund total and by extension its return, albeit by a small amount, but its compound interest/growth and her money.

There are other aspects of the product that simply do not sit well with me, life insurance for 3600, 5 per year, and allocation isn't 100% for " first few years" the values shown are "offer offer" .

Compared to Zurich Privia 4 it simply feels wrong.

Of course I might be wrong in my analysis too, but would like to hear anyone elses experience or professional view.

I don't think shes not going to do it based on my analysis and her sisters advice ,.but I'm uncomfortable with it.

Thoughts?

 

[Brendan Burgess]

You are right to be suspicious.

Acorn Life Pension Fees

Hi I just wanted to let people know about my experience with Acorn Life. Our company recently introduced a pension scheme for its staff through Acorn Life. The Acorn representative spoke with all staff in a group, it was a very poor presentation to say the least. There was no presentation just...

www.askaboutmoney.com

Tell your sister in law to get out now. She has probably lost most or all of her money in initial charges.

This was a uniquely Irish approach to investment funds years ago, but I think that Acorn is the only one still doing it.

Brendan

 

[GSheehy]

Not sure what document (it might be a disclosure document?) you're looking at but all companies would show values gross and net of prevailing exit tax. Yes, the exit tax is deducted automatically in year 8 but it would also be deducted from the growth if the policy was cashed in before the 8th anniversary.

Original policy schedule would/should have the nitty-gritty of the charging structure.

It's likely that the AMC is circa 1%, that there may be a nil (or reduced) allocation period and that this would also apply to the additional 5% 'indexation'. Not sure if they have a policy fee and if there's references to Offer to Offer then there's a 5% bid/offer spread on the policy.

In days of yore all companied would have had a life assurance benefit of circa 15 X the annual premium on their savings contracts. There would be a charge (probably by cancelling units) for this cover until such time as the policy value exceeded the sum insured.

Way better value on savings products in the market.

Gerard

www.saveandinvest.ie