Personal Finance: ScotAm's expensive bonus

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Indy Lifestyle Online
Welcome back. It barely seems like it, but here we are one week later, with a fresh Your Money section. I hope you like it. And to the anonymous writer who asked for my picture to reappear at the top of this column: some people are easily satisfied.

More importantly, there are a number of important topics considered this Saturday.

Perhaps one of the most interesting, albeit one of the shortest stories, is the analysis by Andrew Verity of Scottish Amicable's new Bonus Bond. What staggers me, and many financial advisers both Andrew and I have spoken to, is the very cheek of this product.

After all, here is a company whose performance in the past five years is far from scintillating. Its directors wanted to float ScotAm on the Stock Exchange over the next few years, paying themselves bonuses of more than pounds 14m. Thankfully, their plans were scuppered by a takeover from Prudential.

Yet they are back again, with a sub-standard product which clearly relies on the inertia of its former members to be successful - in sales terms, that is. One wonders at the cynicism of it.

Make no mistake: if you buy this product you will lose out in terms of hefty charges and penalties. There are far cheaper products available, including tracker PEPs from both Gartmore and Legal & General, which achieve the same aim. If you want to invest in Footsie-based equity funds, look that way.

There is, however, one more question: how could Prudential have allowed such a scandalous product to have left the launch pad? If this is the kind of treatment they think ScotAm policyholders, myself included, will accept, they should think again.

On a separate note, the Government's decision to revise its original proposals on the taxation of employee travel is to be welcomed.

Draft regulations meant that employees on business trips would have had to deduct from their expense claims any savings made by not travelling to their normal place of work.

In effect, if you lived in Reading but worked in Oxford and you were travelling in Birmingham, you would have foregone expenses for that part of the journey between Reading and Oxford.

Those most affected would have been people who could not afford season tickets to work or whose place of work varies. In some cases, such as training courses, it would even have been possible for employees to end up paying the company, which would have had to deduct the taxable element, to attend.

The announcement means tax relief will be given to employees who travel to temporary places of work without the need to offset savings from their normal journey.

This is a victory for accountants, including KPMG and Price Waterhouse, who mounted a high-level campaign to persuade the Inland Revenue to change its mind.

Good news for millions of travellers then. You may well ask: would journalists have been affected by the original proposals? You betcha.

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