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This regular savings plan offers all sorts of apparent benefits but what is not explained to you is the impact of the initial unit charges. They are never mentioned in the illustrations. They are in the terms and conditions but you almost need a Ph.D. in Quantum Physics to work out what is happening. The net effect is that you really are committed to the full term and keeping up the regular payments. Do not lower the payments and do not take a payment holiday because you lose bonus - and the bonus is the key to recouping the charges.

The premium incentive (which ironically loses value and simply generates more initial unit charges), the increased allocation and the "loyalty" bonus are all paid for by the initial unit charges. You get nothing for free. It's all a clever way to keep you tied in until the end.

Like many, I too was (and am) really concerned about this product and all the charges. I built a spreadsheet to model my investment. Essentially for a 1500 pound a month over 20 years and 5.5% growth you will pay 38000 pounds in initial unit fees (i.e. you are losing at least one of your monthly premiums per year). You will also pay 1.5% in contract fees (so the actual return is 4%) but I am not clear if there are investment products that have lower basic annual fees.

Clearly this sounds terrible and the surrender penalties are high. However once you add in the incentive at the beginning and the final bonus plus an enhanced allocation of 102% I was extremely surprised to see that you seem essentially to get the charges back. I modelled for 7.5% growth and got the same result. Essentially none of these bonuses are bonuses. They simply pay for all those charges. If however you stick to it and choose good underlying investments then it is not a disaster. But you must keep up the full premiums (or you start to lose the bonus) and you must get to the end.

I would never choose this product ever again but I'm not sure I need to bail out either. However, if you are not getting the 3 types of additional payments then I think you will lose money. I believe they must make a lot of money from people who exit early (which I think is disgraceful and unethical) because it seems that the product is performing badly.

This product is in my view overly complicated, mis-represented, inflexible and I would stay clear of it but if you are already in, maybe you should think carefully about whether to exit. You would need to find something with much lower annual management/contract fees to recoup the surrender losses. I haven't modelled products with shorter time spans and therefore perhaps no bonuses. Maybe you do lose money on those. I am not a financial adviser so I hope my calculations are correct!

If you haven't yet invested in Quantum then my advice is simple: don't!

Product or Service Mentioned: Royal London 360 Quantum Savings Plan.

Reason of review: Not as described/ advertised.

Preferred solution: Full refund.

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