Things you need to know

Here’s a few more things it is important to understand about our With-Profits Bond…

• If you cash in your bond within the first five years it may be subject to a penalty charge. If you cash in your bond during adverse market conditions, we may apply a Market Value Reduction (MVR). A penalty charge or MVR could mean you get back less than you have paid in.
• Your original investment value will be adjusted for any partial withdrawals when calculating both the life cover and the 10 year guarantee.
• If you have at least £10,000 in your bond you can withdraw up to 5% of your original investment each year, without any penalty charges.
• However, by cashing in your bond or withdrawing more than 5% of your original investment in any one of the first 5 years, the total amount you withdraw would be subject to a penalty charge.
• If you surrender during the early years you may get back less than you have paid in.
• The tax treatment of the policy depends on your individual circumstances and may be subject to change in the future.
• Inflation will reduce what you can buy in the future with your investment.
• Bonuses are not guaranteed as they are based on future investment returns, which may be lower than expected.
• Basic rate tax payers will not have to pay any capital gains tax or income tax on payouts from the bond, as tax has already been paid by the Society on the investments in the with-profits fund. Higher rate tax payers will have to pay additional income tax on any gain they have made. Non tax payers cannot reclaim any tax that has been paid by the Society.