Glossary

Market Value Reduction (MVR)

If you take out all or part of your money from our fund we may reduce the amount you receive if the value of your investment is significantly greater than your share of the fund. This adjustment is known as a Market Value Reduction (MVR). It is designed to protect investors who are not taking out their money and its use means that you get a fair share of the with-profits fund in which you have invested. An MVR would reduce the amount you receive and could mean you get back less than you paid in.

Smoothing

We use profits from the good years to improve the return in the bad years.

Sum Assured

The sum assured is the amount payable on death.

Investment Performance Adjustment (IPA)

An IPA is used to adjust any significant difference between your monthly bonuses and the actual performance of the with-profits fund. Generally the IPA is expected to add extra value to your ISA and over time the IPA will ensure that the value of your ISA will largely reflect the performance of the with-profits fund. However the IPA could be negative to reflect a decline in the value of the with-profits fund which would mean the value of your ISA would fall and you could get back less than you invested. A new IPA rate is used for each tax year and each rate is reviewed regularly.