Is that because of unrealistic expectations, or bad management? The "friendly" societies claim the former, but critics say that high charges contribute to poor investment returns.
Confusion arises because of the tax-free status of these plans. They have been tax-free because governments have been keen to encourage people to have some life assurance, which they all include. But plans have been sold as an investment on the basis of tax-free payouts, which has led to the unrealistic expectations.
So who are the 10-year accounts aimed at? Peter Stanford, head of marketing at Homeowners Friendly Society, says: "Friendly society savings plans are mainly for those on limited incomes who need both the discipline of saving regularly for their future, and the comfort of life assurance."
The investment limits give an indication of the kind of people the plans are aimed at. The maximum monthly amount allowed is pounds 25, or a lump sum of up to pounds 270 a year. To get the full tax-free status, the plans must be maintained for 10 years. Early encashment could mean a tax liability or the return of less than you have paid. Worse, if the plan is closed before 12 monthly payments have been made, you will typically get nothing back at all.
In effect, the plans work in exactly the same way as endowment policies, where some of the premiums pay for the life insurance and the rest is invested. Returns from friendly society plans will be hit by the cost of that life cover, as well as other expenses and charges.
An illustration from Homeowners shows that someone investing the maximum allowed amount each month - pounds 3,000 over 10 years - would pay pounds 598 in deductions. These deductions bring investment growth of 9 per cent down to just 4.7 per cent a year, hardly headline returns.
If this does not sound attractive then a friendly society 10-year savings plan probably is not for you. But if you need the discipline of being forced to make regular savings and could use a little life assurance then the tax-free status makes them worth considering. Green or ethical fund options can be arranged for environmentally conscious investors.
q Contacts: Homeowners Friendly Society, 0800 302100; Liverpool & Victoria, 01273 292333; Tunbridge Wells Equitable Friendly Society, 01892 515353; Manchester Unity Friendly Society, 0161-832 9361.