Royal Liver With Profits Endowment savings

J

JohnFR

Registered User
Messages
2
In 1990 I took out a 'with-profits' endowment savings policy with Royal Liver. The term was 30 years so there's a few years still to run. In 2010 Royal London took over all these policies and every year since then they have given me a 0% annual bonus, despite also showing me that the fund is averaging over 8% return in the same period. When I queried this I was told that Royal London took over this fund from Royal Liver as it was about to collapse and have stopped giving out bonus's in order to be able to pay the final sum assured. There was no mention of any problem with the fund, from either Royal Liver or Royal London, in 2010 when it was taken over.
I've also been told by Royal London that they can't guarantee that I won't get a 0% maturity bonus in a few years either. Has anyone else been having this experience? Has anyone had one of these policies reach maturity in the past few years? The whole thing seems wrong. My recent statement shows a bonus of EUR1360 going to the fund less charges of EUR370 for administering the fund and my premium just disappears every year and since transferring to Royal London in 2010 the total value of my policy hasn't changed. At this rate 30 years of savings will have resulted in an average annual return of 2% (not even keeping pace with inflation). Are these guys crooks?
 
My wife had one sold to her bya door to door Royal Liver guy when she lived at home. A modest 30 year plan with a modest sum assured, there were no bonuses paid as you said yourself and she received zero maturity bonus, the cash in value was too small to consider, in the distant past it was the maturity bonus that was the cream and why a person stayed in these policies.

We had to suck it up and thank ourselves it was small money, sweat the bigger stuff, I bet you will get zero at maturity but you will get the guaranteed maturity, you have not indicated the premium involved ?.
 
With profits policies are mainly invested in the bond market. The return on bonds at the moment is zero to negative return, so you won't be seeing any return as no return is being generated.


Steven
www.bluewaterfp.ie
 
Thanks for your responses. Sounds like the same product sold door to door to young professionals on the basis of false promises. Luckily my premiums are modest and I'm not depending on this as a savings vehicle. I didn't know that in 1990 when I was told I could expect a 600%+ roi (actually written on the policy). It's more the thought that a company could get away with this and keep their good name. They are showing me the fund returns on my statement, averaging over 8% since 2010, and still saying this money is going back into the fund to pay the final maturity value. Your response confirms my suspicion that this final bonus will also be 0%. Maybe I should just suck it up or maybe I should try to expose them for the crooks they are to try to save todays 20 year olds from this same scam. Any suggestions?
 
With profits funds are closed now and there are no door to door salesmen anymore, too much compliance paperwork required.

The product is not a scam either. Those policies produced returns for many people for years. But with dwindling amounts being invested in them and no returns in bonds, they are an investment product that has just died. I don't see any point in people hanging onto them anymore, especially for the piddly amount that people tend to put into them each month.


Steven
www.bluewaterfp.ie
 
'' I don't see any point in people hanging onto them anymore..'

They should hang on, surrender of the policy before maturity will be pointless as the value will be terrible, as stated these tend to be small monthly payments, keep them going and collect your full guaranteed maturity.
 
Anything sold door to door has to involve a huge distribution cost.

If as Steven says they are mainly invested in the bond market, they could not be returning 8%

There is zero transparency with these products, and that was always the case.

I fully understand that these products provided good returns at one point but they should be illegal and the people that manufactured them were just crooks.

At least Bernie Madoff had to go to the trouble of lying to investors. Royal London can just say "close to collapse" and no one can ever check that. No one can ever check how much of the return goes to investors and how much to provisions, and if the provisions are ever released to the investors.
 
cremeegg said:
Anything sold door to door has to involve a huge distribution cost.

If as Steven says they are mainly invested in the bond market, they could not be returning 8%

.
Click to expand...
Why not ? Depends on the bond fund of course but since 2010 bond prices have soared. Example would be the Ir Life pension protection fund which is invested in mainly LT Euro Gov bonds is up around 60% since 2010. So his 8% pa is about right.
 
You must log in or register to reply here.
Back
Top