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AVC Final Bonus at £0

Discussion in 'Retirement' started by HRHHenry, Mar 16, 2020.

  1. HRHHenry

    HRHHenry New commenter

    I ve been keeping an eye on this recently as I turn 55 in August and was thinking of widthdrawing some of my fund. The final bonus was a healthy sum of money rising at about £20 per week over the past few months. I checked it late last week and all seemed ok . Today the bonus has gone to zero. Any thoughts ? Is this temporary?
     
  2. lizziescat

    lizziescat Star commenter

  3. mustntgrumble

    mustntgrumble New commenter

    IMO - it's less of a glitch and more of a mitigation strategy. FTSE AND gold AND oil are all down. There's uncharted territory here. Financial houses/market makers will widen spreads so it is hard to sell at the moment. History tells us that on the big indices you get 30% recovery within a year and full return within four to five years. I assume that the Prudential have locked it down to prevent the post 55s to cash in on panic.

    I've been through two.. these things always look different. Markets usually overreact so FTSE is oversold against history. history tells you not to sell but "past performance is no guarantee of future success"
     
    Dorsetdreams likes this.
  4. ikon66

    ikon66 Occasional commenter

    Just looked again and not only is it back but has jumped up a fair bit too :eek::eek: although not getting my hopes up :rolleyes::rolleyes:
     
  5. mustntgrumble

    mustntgrumble New commenter

    Fingers crossed.
     
  6. Bedlam3

    Bedlam3 Star commenter

    I spoke to the pru about two weeks ago and they said the bonus is applied on 15th March which would account for why it has "jumped." I am assuming it is applied every year on or around this date but be aware a MVR can apply (Market Value Reduction) I would expect that the MVR will be quite high now the virus has struck but I don't know What formula they use to determine the MVR.
     
    Piranha and ikon66 like this.
  7. pauljoecoe

    pauljoecoe New commenter

    Forgive me for if I come across as not having a clue but is there a yearly bonus that is added each year and effectively 'banked'? Or is the final bonus the only bonus that is added when you 'cash in'?

    Not really paid much attention to how the Pru AVC's work.
     
  8. Bedlam3

    Bedlam3 Star commenter

    The final bonus is not guaranteed. Neither is the AVC itself. Both could go up or down.
    If you look on your online benefit statement you will see there is a "value" and then there is a "bonus" which is added when you "cash in".
    The bonus has been going up each year over the past few years. I expect next March it will go down due to the coronavirus impact. I suppose if the virus impact is as huge as expected then we could lose the bonus altogether.
     
    wayside34 likes this.
  9. ikon66

    ikon66 Occasional commenter

    It went down by about £1200 last year :mad:
     
  10. rooney1

    rooney1 Occasional commenter

    Should I take my Avc now? The bonus has gone up. And so has the possible annuity amount.
     
  11. wayside34

    wayside34 New commenter

    Good question I am thinking about when I should take some money the option I would choose is cash of which 25% is tax free the rest subject to tax . I last called the Pru 2 weeks ago no Market Value Reduction would have been applied but maybe now 'we' would have to call the Pru . Post 8 by Bedlam3 makes a good point .

     
  12. rooney1

    rooney1 Occasional commenter

    I might phone them tomorrow and talk to them. But then I have to decide what actually to do. I wasn't quite ready for this. But Bedlam's post had made me think.
     
    wayside34 likes this.
  13. ikon66

    ikon66 Occasional commenter

    You can phone them but they won’t give you any advice only what your options are. Keeping mine on the long term as up to now it’s been the best investment I have compared to isa and savings
     
  14. pauljoecoe

    pauljoecoe New commenter

    So, the ‘sensible’ thing, if you can afford it is just to leave it for a few years now to let it recover?
     
  15. ikon66

    ikon66 Occasional commenter

    And that’s the million dollar question, when to take out an investment :confused::confused:
     
  16. JanE60

    JanE60 New commenter

    My AVC pot is around 7k down on January value due to recent events. Can only hope it recovers if only slightly before Autumn as that is when it matures and I have to take it in some form.
     
  17. wayside34

    wayside34 New commenter

    JanE60 was your AVC in stocks or in with profits bonus ?
     
  18. JanE60

    JanE60 New commenter

    I think stocks (it is managed by LV - ex-teachers building soc).
     
  19. wayside34

    wayside34 New commenter

    Thanks mine is with profits , think I will sit tight for the time being
     
  20. JanE60

    JanE60 New commenter

    No option but to sit tight now. No point cashing it all in when at rock bottom. Things, as they say, can only get better...
     

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