The return on investments varies as it really depends on the underlying investment portfolio. The bond is just the tax-efficient way of investing and it’s then dependent on the type of portfolio selected.
A high growth portfolio can easily achieve double-digit returns whereas a cautious portfolio around 4-5% per annum.
There is a bond managed by Prudential which is very popular as clients have confidence with the name. They are considered low risk and return around the 5% mark.
Can a client pay a certain amount pm?
No, generally these are lump sum investments, you can start with as little as £20,000 on some. But I would say the average investment size is around £100,000. Again it comes down to the bond selected and underlying investment portfolio.
Is there a holiday period where you can stop paying for a few months if required?
Not really applicable, many clients start off with an initial investment and add to it over time.
Can you transfer profits from an SL into these bonds, before being taxed?
If only that was possible, as far as I know, all product providers only invest in a clients individual name/s. Typically, funds are from house sales, pension lump sums or money in non-tax-compliant UK products such as ISA’s etc.
What are the fees on the way in and the way out?
Again, dependent on the product, the client can normally elect to pay an entrance fee or exit penalty, typically an entrance fee would be 2-3% but it’s dependent on how much work needs to be undertaken etc. You can elect to pay a redemption fee and this can be anything from 1% to 10% and over 5,8 or 10 years. There are so many variations to choose from.
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