Income Protection - our new deal

• Regular monthly income is payable for the whole time you are on half pay or no pay


• We have added lump sum benefits when you first go on to half pay and again on to no pay


• Regular monthly income in medical retirement until age 60 if you are retired for a physical (not mental)condition or until you are able to get alternative work


• We have added a lump sum benefit when you find a new job


• Lump sum benefit of 6 months’ pensionable pay for critical illness. 23 conditions are covered – full details from the policy document on our website

We have written to all existing members covered for Income Protection. They have been upgraded automatically where it is clearly in their interest, but still need to be underwritten for the critical illness benefit in some cases. Members with older policies (1997 to Sept 2002) can apply to switch. They will gain the above benefits but will be giving up the possibility of medical retirement benefit for mental or nervous conditions.

Interesting Times

You could be forgiven for thinking that putting your cash under a mattress is not that different from trusting it to a bank! Certainly you will be lucky to earn anything on your cash in a bank. But you will be safer in a bank. No individuals have lost out from the UK banks that fell victim to the credit crunch. Statutory protection has been increased to £50,000 (£100,000 for joint accounts), but normal practice is for depositors to be rescued – for example, savers with Bradford and Bingley were switched to Abbey (part of the large Banco Santander group).

Interest rates continue to fall. Many rates have already plunged to rock bottom for savers. Current accounts sometimes pay interest but those deals are hardly worth having now. Expect banks to look for more ways to charge for ordinary banking. It rarely pays to stay loyal to your bank; so shop around for the best deals available.

The recession is the reason for low interest rates. Low rates help those with mortgages and discourage us all from hoarding cash. To the extent that we spend, we help business.

You might even want to pick up a property whilst they are cheap, but you will need a good deposit (20%+)for starters. There is now a huge reluctance for the banks to lend unless they are safe from a fall in values, and they can see that you have the income to service the loan comfortably.

Other investments may have more appeal whilst the return on cash is so low. It is a good idea to spread your investments, and there are various ways of achieving this – even if you only have a small lump sum. Our with-profits fund is amongst these and has about 40% of its assets in government bonds, 40% in equity funds and the rest mainly in investment-grade corporate bonds and commercial property.

Our ISAs are intended for the longer term investor – but they are flexible and can be cashed in at any time. If you are prepared to risk the markets, our ISA could help you build up the deposit on a house!

We do more

The Society not only provides with-profits savings plans and lump sum investments – it also provides insurance policies: for example to pay off your mortgage if you or your partner dies, or to provide income if you are off work and your pay is reduced or stopped due to long-term sickness. This year, we have cut the cost of mortgage protection policies and added lump sum benefits to the income protection policy (see ‘Income Protection - our new deal’ inside).

As a Friendly Society, we are owned by our members – there are no shareholders. We do not go in for high-pressure selling – our talks at Hendon and elsewhere are designed to explain finance generally, and the benefits that go with the Job in particular.

Moving with the times

It is a rapidly changing world. We have been doing our best to keep members abreast of events. As well as mailing our newsletter to everyone, we now have display boards in nearly 200 locations around the Met. Here you can pick up our latest accounts, newsletter and details of all our products. Or you can get all these on Aware (under F for Friendly!) or our public website www.mpfs.org.uk.