INVESTORS who are being advised to switch out of insurance bonds following the Budget tax changes could be worse off, once they take tax and charges into account, according to Anthony Coyte, head of Investment Steering Group at AWD Chase de Vere.
Coyte believes that investors may be being encouraged to churn their bond holdings, simply to deliver additional commissions to brokers. He said: "Investors being told to switch out of insurance bonds on the sole justification of the Budget tax changes are being duped. "It could take up to nine years for a basic rate taxpayer using a bond to provide income to recoup the additional charges incurred by switching to a slightly more tax efficient collective with the same underlying asset allocation. "It's not quite as bad for those investing for growth, but even here the additional charge...
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