For many years now we have been extolling the virtues of using traded endowment policies within the "do it yourself" pension schemes now readily available to all and sundry. Why?
Well first of all, pension scheme fund managers have not fared particularly well at looking after our long term savings, so it has now become essential to mix and match a whole bundle of investments in order to seek out above average returns. Hence the rise of Hedge Funds, but here we are not advocating anything quite so racy as that, but just continue to plug the simple well established old fashioned endowment policy.
A good example of this is Prudential policy maturing in 2021 on our current sales list estimated to mature at approx. £240,000 (not guaranteed). The benefit of this policy is to underpin the availibilty of cash for anyone retiring that year and the knowledge the Prudential will still be around in some shape or form to grab hold of, if required. The yield is calculated at a respectable 6% on an asking price of £82,000 and whilst it can not be truly compared with Gilts maturing the same year the yield differential is significant.
This is why we think every SIPP and SSAS should have one!!!