When choosing an offshore savings or pension plan, the special offers or enhanced terms influence which policy many expatriates choose. This has resulted in more and more sensational offers from the product providers - but do they really offer any value? 
 
Unsurprisingly, the answer is yes and no!

However, whether the answer is yes or no primarily depends on whether the enhancements given are in 'initial units' or 'allocation units'.

The first one to two years contributions to a policy are usually assigned as initial units and these are designed to cover the charges over the whole term of the policy. By the end of the policy term, there will be very few, if any, of these units left.
 
Accumulation units are the units which make you your money and which will provide you with your lump sum or income at the end of the policy term. As these units are not designed to be depleted over the policy term, they add value to your policy. 
 
There are some policies which offer, let's say, one free additional months contribution so long as all contributions are paid for the first 5 years of the policy.  This does not sound unreasonable and, if given in 'allocation units', it is an excellent offer to kick-start your savings.

There are other policies which, let's say, offer 150% allocation for the first year and a half. Sounds great, but think about it - how can they afford to do this? If you contribute a £1,000 a month, they will have given you an extra £9,000 over this period! Where has this money come from? 

The answer is, they given you initial units during the 150% allocaiton period - which they will effectively be taking back from you in charges over the term of the policy - and then allocation units once they are offering 100% allocation after the enhanced period. Ultimately, at the end of the policy term  virtually all the initial units will be gone so it makes very little difference whether you where give 150% oor 100% of these.