Posted by Flora Maudsley-Barton | November 23, 2012
Topping up a Skandia Maximum investment plan
Skandia has decided that its Maximum Investment plan (MIP) will be one of the causalities of RDR. This means that from December 31st 2012 you will not be able to top up your plan.
Now is your last chance to make the most of your MIP.
Why should I top up my MIP?
In short you will continue to take advantage of all of the feature of this type of plan:
- When the plan matures, your lump sum is free of income or capital gains tax if the top up is below £3,600 per year.
- If you top up above £3,600 per year, you still get the investment benefit, and part of the proceeds will have to go on your tax return.
- You can increase or decrease your contribution, over the life of the plan without affecting your right to withdraw money free personal tax (income tax and capital gains tax)
- You have a wide range of investment funds to suit your attitude to risk
- It might be a good ‘next step’ after you have filled your pension for the year, or if you don’t like pensions.
- Good choice if you are going to exceed the £1.5 million lifetime limit
- You can segment your investments, so making it easier to withdraw chunks of money before the plan matures
- The life cover while you are saving might be handy.
N.B. The value of units will fluctuate and you may not receive back the full amount of your investment. As with all investments you should seek professional advice if you are in any doubt about what to do next.