Offshore-Rebates.com believes that saving regularly into a savings plan from one’s income is a sensible and prudent thing to do. After all we are all going to get old and our retirement nest-egg is not going to appear magically without some effort from ourselves.
However, Offshore-Rebates.com does not believe in arranging life cover and savings as one plan. This is expensive and inflexible and we believe rarely in your best interests. We also believe that the typical pension plan or regular savings plan on offer to Expatriates is wildly expensive, inflexible and the only justification we can see for selling them is large commission. We therefore do not offer them.
Instead we offer savings direct into unit trusts, often the very same ones the life companies are offering you, but at greatly reduced costs. Our savers are never locked in to long-term vehicles with surrender penalties, and all of your fund value is available to you at any time you choose. You may stop and re-start, add a lump sum or withdraw one, increase, decrease or miss a month at any time you wish - just let us know. There are no extra charges for these facilities. In fact you pay much less than traditional schemes. There are life company regular savings products that do not have huge costs and fixed terms, and we are happy to sometimes use these where required, but we will always discount the cost of these too.
Typical products badged as savings plans or pension plans carry what are known as initial units and bid/offer spreads. Initial units are those which carry higher charges and can last for up to 36 months in some case. This means that even in the case where it is for 24 months (a typical scenario) you are buying assets that have an extra charge of typically 6% per annum built in, and you will be stuck with these for the entire life of your plan. In other words they will leach away 6% pa of the value of your first 2 years contributions, every year until maturity. If you are paying say £500 pm in, that’s £12,000 paid over two years and you will pay 6% of this every year until maturity. Stop the plan and you will still be charged it. Surrender it and you will lose all those outstanding 6% pa, added together as one lump, and levied as a penalty. Just to reiterate our example, that is £720 per annum, during each year from year 3 to maturity. Are you paying the typical 7% buy/sell spread too? On £6000 pa that’s another £420 pa , plus a policy fee of say £4 pm (£48 pa) , mirror fund fees? Broker Managed Funds 1-2.5% pa and you can see why it is so hard to make money. Up to 18% pa in the first year or so is not unusual – JUST TO STAND STILL
Solution? Offshore-Rebates.com uses investment straight into funds and you avoid all of the above fees. Obviously you have to pay something but we have reduced this by typically 40% from the cost of dealing direct and you’d pay just 3% entry based on each contribution, and only as it is saved. Once it is in, apart from the underlying fees of the fund, typically 1-2% pa (all funds must charge something in order to run), you have nothing more to pay. No initial units, no policy fees, no exit penalties, no lock-ins, no fixed terms…no ongoing obligations!
For these we use mainstream fully regulated providers such as Ruffer, Apollo, Odey, Eclectica and Midas Capital.
