Should we cash in our Prudential with-profits bond?

[Daily Express]

My wife and I are local Guernsey residents in our early 70s. We are both retired teachers, drawing our retirement and old age pensions, so we have a joint income of just over £30,000 p.a.

We also have £140,000 invested in Lloyds and Abbey. Added to this we took out a With Profit Investment Bond with Prudential in 1999 for £50,000. Our recent annual statement showed that on the day of the statement it was worth £90,000. Over the time the money has been deposited with the Pru we have seen it yoyo quite dramatically at times, along with the added ?Market Value Reductions? that have been put into place.

I should state that we are no longer interested in long-term investments, as now is the time for us to use some of this cash to enjoy the life we have left.

My question is simply this: would we be better to cash this bond and place it say within a bank ? knowing all about guarantees, inflation and poor interest rates - or do we leave it where it is, only to find that overnight it may devalue greatly as the markets change given, as we see it, the imminent collapse of the euro?


Roger Goldsmith

[Annie Shaw]

This is a question for a financial adviser. You need someone to look over all your investments and advise you on how to make the most of them. You can't really just take one investment and take action on that without looking at it in the context of the bigger picture, including your financial aims (enjoying life? leaving an inheritance for someone? paying debts?) and resources.

[Jonathan Hill]

Agree with Annie about taking advice. Paying a fee to look at your wider circumstances without any sales pressure may well be worthwhile. As a side note the Pru bond may be exempt from care fees assessment if this was ever to be needed. I don’t know if the rules differ in Guernsey, but again a local fee based adviser should be able to help.