Should I Stick or Twist?
The question any investor or saver has is should they stick with their with profits policy or twist, where twist means cash-in, switch or transfer?
As with any aspect of this subject, there is no universal answer. Every single case must be judged on its own merits.
However, we can provide some general considerations which are likely to be relevant to just about any circumstance:
- Any analysis needs to start with a general review of the performance of the with profits fund you hold. Is it good, bad or somewhere in between?
- How long have you held the investment, how long is it intended to be held?
- Are there important or significant guarantees you may want to maintain?
- What is the tax position of the investment (this is important because with-profits insurance funds have tax deducted at source which non-taxpayers cannot reclaim; likewise there can be some tax advantages for 40%/45% tax payers).
- What is the future bonus potential for the fund/investment you hold?
- What charges are you paying?
- How does all of the above compare to alternative homes for this money?
Answering these questions will allow an analysis to be undertaken which will compare the value of staying with what you have or moving it elsewhere. It will look at the advantages and disadvantages, the risks and give you precise facts and figures. This will allow for an informed decision to be made about how to deal with your plan moving forward.
This individual report is the only way to get an informed position.
The difficulty in getting generalised views is that two people may have with-profits with the same company, but one should stick and one should twist. This maybe because of their individual circumstances or it may be down to the timing of when they invested, or they may be in different series of bonds with the same company. There could be many variables, which lead to different positions even though they look similar on the surface.
For a free, tailored, review of your individual options just fill in the form on the right of this page.