In February I was advised to put my Pension Lump Sum and some money I had on deposit but earning nothing , in to a Zurich Matrix Easy Access Investment Bond. Total approx €90,000. That was before Covid 19 was big news. There was a delay in getting some paperwork so I didn`t get the Policy Details until earlier this week. Now, checking on the Zurich website, each of the 4 investment funds have fallen in value, one as much as 17.43%, and the Risk categories on some have gone up to 6, whereas I`m a 3.
Then I read that the Government is taking 1% and a further 41% on gains if I make withdrawals. As a Pensioner I`m on the 20% Tax Rate. The annual management charge is 1.25% on each of the 4 funds in the Bond. From what I read, the markets may fall a lot further. I am within my 30 days cooling off period and I am getting cold feet due to my lack of understanding and the nagging thought that I might have more peace of mind if it was in the Post Office. I value security and ease of access over financial gain, but I thought anything over .5% interest might be worth a go.
Any advice or comments would be appreciated please?
Also, can someone explain an allocation rate of 100.5%? Where does the extra .5% come from? I`m assuming the the total amount I invested is the 100%?
Looks like this poster/pensioner is going to lose anything from 10 to 15k due to very bad advice. Would they be any recourse available to him/her due this advice?
Hi Steven,
Is it not a major own goal to stick a 20% taxpayer into 41% investment funds?
And shouldn’t a decent risk-profiling process identify someone who can’t deal with too much volatility?
Gordon
Thank you all for your replies, you are confirming what I suspected, these documents are not written in simple English and seem to be designed to confuse lay people like myself.
Thanks for that Steven. So gains are taxed at 33% in Ireland?
The point I’m making is that the OP pays 20% income tax and 33% CGT, but this ‘advisor’ has stuck him/her into something where he/she pays 41% on everything. Madness. A classic case of the ‘advisor’ only recommending the products that he has available to flog (and the ones that pay him).
It's no wonder the ordinary lay person is so reluctant to invest in these when the jargon is so hard to understand.
With life company investments and other fund-type investments, one pays 41% on both income and gains. Whether one is realising gains on units in order to generate income is really a moot point. The return on the investment is obviously a function of underlying income and gains. For a 20% taxapayer, why would someone want to have their entire return taxed at 41%, when by going another route they could have a mixture of dividend income subject to 20% income tax and gains subject to 33% CGT.
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