The Return of the Maximum Investment Plan (MIP)?

July 28th 2010

We would always recommend taking advantage of tax efficient investments as a priority, which would include using pension and ISA allowances to their full advantage. Once these have been fully utilised where you look next, especially in these days of low interest rates, is an interesting exercise.

 

The MIP is an attractive proposition for those higher earners with surplus income which can be committed for a period of 10 years. The MIP is a regular savings plan which comes under the category of “Qualifying Policy”. In order to be classed as qualifying, meaning the benefits can be paid out tax free at maturity, a policy must meet certain criteria. These include a minimum period of 10 years, fixed regular premiums and an element of life cover.

 

It would not be fair to compare the MIP directly to a pension or an ISA, but unlike pensions and the ISA options, MIPs are completely unrestricted. You can pay in as much as you want, there are no limits on the maturity values and you can have as many as you want. Because of the life cover requirement, it is important that applicants are in reasonable health, 18 years of age or over and under the maximum age which is usually around 80.

 

The plan is already offered by a number of high profile life companies with more coming to market with a proposition in the next few weeks.

 

For more information on Maximum Investment Plans call us on 0113 287 8200 or e-mail advice@prosperis.co.uk