Imagine your lottery ticket has just won you thousands of pounds but you forgot to check your numbers. That's the situation facing thousands of policyholders who invested in a With Profits Bond around 10 years ago and who don't understand their 10th Anniversary No Market Value Reduction (MVR) guarantee.
If you invested in almost any managed fund 10 years ago you would have had a disappointing return. A with-profits fund is a managed fund and has suffered poor returns along with other investments. For example an average investment of £25,000 in an Aviva (ex-CGU) With Profits Bond in 2000 has grown to £30,400.
However, some policyholders have winning lottery tickets. If they ask for their money back on the 10th anniversary they would get a payment of £37,400. That’s £7,000 more than the investment has grown by. We've calculated that those who invested the year before are due an average windfall of £5,700.
And just like the lottery ticket, if these policyholders don't claim, they are likely to lose their winnings, even if the company allows them to carry forward this No Market Value Reduction guarantee.
The table on the right lists insurance companies who at some point have sold With Profits Bonds with this guarantee on the 10th anniversary. If you own one of these policies, or you think you know someone who does, we can help you make an informed decision on the investment in one of three ways:
If you invested in almost any managed fund 10 years ago you would have had a disappointing return. A with-profits fund is a managed fund and has suffered poor returns along with other investments. For example an average investment of £25,000 in an Aviva (ex-CGU) With Profits Bond in 2000 has grown to £30,400.
However, some policyholders have winning lottery tickets. If they ask for their money back on the 10th anniversary they would get a payment of £37,400. That’s £7,000 more than the investment has grown by. We've calculated that those who invested the year before are due an average windfall of £5,700.
And just like the lottery ticket, if these policyholders don't claim, they are likely to lose their winnings, even if the company allows them to carry forward this No Market Value Reduction guarantee.
The table on the right lists insurance companies who at some point have sold With Profits Bonds with this guarantee on the 10th anniversary. If you own one of these policies, or you think you know someone who does, we can help you make an informed decision on the investment in one of three ways:
- Free Review - We can write to your insurance company on your behalf, ask the right questions and get all the answers we need, then write back with a simple explanation of your policy and your options.
- To really understand how your policy works, you can read our online Guide to With Profits Bonds.
- Request our Aluminium Review Pack. This is our pack designed to help explain how the 10th Anniversary Guarantee works, how you can check if you have this feature, actions you should consider and a summary of potential disadvantages and consequences that might arise. Those policyholders who decide to surrender their investment may be looking for an alternative home and the pack therefore also includes our summary of funds we like that may be suitable for cautious investors.
For more information, please call Miles Hendy on 01454 327788, send an email to miles@fraserheath.co.uk or request details online here.