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FSCS - State of Orgin Print E-mail

TEP - 14 November 2013

What constitutes a British investment? Presumably I would need to be domicile in the UK to take advantage of a scheme which is effectively underwritten by the British Government?

Oddly the answer isn’t as cut and dried as you might think, in fact in some cases it has more to do with the origin of the investment, than the origin of the investor.

The FSCS was primarily put in place to protect British investors against intuitional bankruptcy. So it may come as a surprise to discover that overseas investors can also take advantage of the protection.

One of the elements covered by the FSCS are ‘with profit’ Endowments. A product which is all but obsolete in terms of the new business sector but protection still has to be maintained for the millions of policyholders left over from the ‘mortgage boom’ of the late eighties and early nineties.

Here comes the twist, although these ‘with profits’ are no longer available directly from the Life Offices they can be purchased by way of a secondary market known as the Traded Endowment Market, or TEP market for short.

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Singapore Sling Print E-mail

TEP - 16 May 2013 

 The astonishing rise in the value of the Sing Dollar has resulted in Singaporeans literally slinging money at the UK property market. An article on Bloomberg: http://www.bloomberg.com/news/2013-02-28/singaporeans-turn-to-berkeley-s-london-property-on-currency-gain.html reported that Singaporeans snapped up more property in London than any other country amounting to 23% of total sales.

Why the UK? Well in part at least this has to be down to timing, specifically the remarkable buying power offered by trading the Sing Dollar against the pound. In February of this year the Sing Dollar hit its highest value against the pound since 1981.  Perhaps equally important is the matter of security.  Only a handful of countries have managed to retain a Standard & Poor’s rating of AAA, the United Kingdom being one of them.

Delve a little deeper and you’ll find that it’s not only UK property that has been turning the heads of Singaporeans. They have also developed a keen eye for UK insurance policies. Insurance policies is probably too broad a term, in fact it is one specific area which they have targeted, that of TEPS.

TEP’s stands for Traded Endowment policies and refer to a specific type of insurance policy which used to be available in the UK known as the ‘with profit’ endowment policy. Ordinarily to take out such a contract you would have to be a UK citizen and demonstrate insurable interest but here’s the twist, TEP’s can be traded to almost anyone providing they are able to satisfy International Money Laundering regulations.

Three overwhelming arguments for investing in TEP’s rather than Property are security, security and security. I say this because TEP’s are protected in three ways:

 

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The Rating Game Print E-mail

By Paul Harrison – 1ST Policy

I would like to highlight one investment product, which is almost always overlooked when faced with all too familiar question set out below:

Q. Is there anywhere where I can put my money where it will be as safe as the bank or building society but has the possibility of providing a higher return, than the paltry interest rates currently on offer?

This problem is not confined to British Shores, in truth it is an international problem. In fact, an initiative of ‘disinvestment’ seems to be the order of the day in many parts of the world. Uncertainty is so rife in some European countries, that investors are literally withdrawing monies from deposits in order to purchase short term German Bonds, on wait for it.... negative yields!

This sort of damage limitation may seem severe but it just goes to show how desperate many investors are right now to ensure that their money is held by a reputable country. The ratings company Standard and Poor’s provides a publically accessible rating service for various institutions including countries themselves. Since Germany has been awarded the top rating of AAA, it becomes an obvious choice especially for Europeans since they remove any currency risk by keeping their investment in Euros. Outside of Europe, the Far East for example may sight the US Dollar or Pounds Sterling as a stronger or more stable currency given the ongoing austerity measures being continually implemented within the Euro Zone.

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Foreign Exchange Outlook September 2012 Print E-mail

Scotiabank – September 2012

 

Collective stimulus and liquidity injections by major central banks, decelerating growth in emerging-market economies, speculative moves in selected commodities and persistent Europe-centred financial stress currently dominate investor sentiment in foreign exchange markets.

The EUR will remain weak against all major currencies. The CHF value will be anchored versus the EUR by policy and the GBP outlook is bright.

Market Tone & Fundamental Focus

Central bank intervention, growth stimulus in China and Brazil, persistently strong European financial market stress, speculative trading dynamics in commodity markets and uneven directional shifts in emerging-market assets are some of the primary factors swaying capital flows in foreign exchange markets.

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Royal London announces with profits bonus rates Print E-mail

TEP - 31 August 2012

Royal London, the UK’s largest mutual life and pensions company, has announced bonuses for 2011 for with profits policies in the Royal London Long Term Fund and in the closed Scottish Life Fund1.

With effect from 1 January 2012:
• Regular bonus rates are maintained for Royal London policies
• Regular bonus rates are maintained or increased for Scottish Life policies
• Most final bonus rates have been increased for both Royal London and Scottish Life compared with January 2011
• The benchmark 25-year payout on a Royal London £50 per month 25-year with profits endowment maturing on 1 January 2012 is £33,7082 , representing an annualised return of 5.9% and a real3 return of 2.8% p.a.
• The payout on maturity of a Scottish Life1 £50 per month 25-year with profits endowment is £30,8312 , representing an annualised return of 5.3%, and a real3 return of 2.1% p.a.
• The payout on vesting of a Royal London 20-year £200 per month with profits personal
pension is £89,3734, representing an annualised return of 5.8%.
• The payout on vesting of a Scottish Life1 20-year £200 per month with profits personal
pension is £79,5404, representing an annualised return of 4.8%.

Commenting on the announcement, Royal London Group Finance Director Stephen
Shone said:

“Our policyholders have once again enjoyed good returns from their with profits policies over the medium to long term.

“We believe that for such investors the fundamental argument for investing in real assets remains strong. Over the longer term, real assets - such as equities and commercial property - have delivered above inflation returns for investors. Today’s announcement shows that the annualised return on a Royal London 25-year with profits endowment is 5.9%. This represents an annualised real rate of return (over and above inflation) of 2.8%. And for a similar Scottish Life policy the annualised return was 5.3%, with a real rate of return of 2.1%.

“In the Royal London Long Term Fund, the asset shares for relevant policyholders will be enhanced as a result of a mutual dividend being allocated for 2011.

“In the Scottish Life Fund, we have enhanced asset shares by 6% this year as part of our
program to distribute the Estate. Payouts for maturing policies are also being targeted at
more than these enhanced asset shares.”

-End-

 
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