Your investment bond is intended as a medium (at least 5
years) to long term (over 10 years) investment. But you can take money out of
the bond in the following ways:
- by setting up regular withdrawals (monthly,
quarterly, half yearly or annually)
- by taking a one off amount from the whole bond
- by taking one off amounts from individual
segments or even specific funds.
For example
- you might want to take a regular income from your
bond and aim for the potential growth in your investments to replace what
you’ve taken.
Please note: there
are no limits to the amount of money you can withdraw, though in most cases, if
the total in your bond reduces to less than £5,000, you’ll need to close it.
When making any
additional investments;
-
any
existing regular withdrawals on a % basis -
will automatically increase in line with your additional investment
amount
-
any
existing regular withdrawals on a £ basis -
will remain at the same level, unless specific instructions are
received in writing or by completing the ‘Investment Bond additional investment
application’ form
.
Cash in all or part
of your bond
To help you respond to changing markets or
your own circumstances, you can easily cash
in all or part of your bond. We currently charge you nothing to
cash in early, although a charge could be introduced in the future. Please note
there could be delays whilst you cash in all or part of your bond. Please see
the Investment Matters section of the Policy Provisions for more details.
Tax implications on
withdrawals
There are tax rules
that apply to taking money out of bonds.
-
You can take up to 5% of the initial
amount invested
(including any additional investment) in each individual policy year for a
period of 20 years, through regular or one-off withdrawals, without any
immediate tax liability.
-
Your 5% allowance is cumulative – so, for example, you can withdraw up to 4%
per year for 25 years; or if you do not use your 5% withdrawal in one year, you
can withdraw up to 10% in the following year with no immediate tax liability,
regardless of your tax position.
-
If you
make withdrawals that exceed your 5% allowance (including any adviser
charges paid from the bond), these may be taxed as income during that tax year.
-
If you’re
thinking about fully cashing in your bond – there are potential tax
liabilities that you’ll need to consider before deciding to cash in. Please see the ‘What about tax if I
cash-in one or more policies of my Bond?’ section of the Key Features document
for information.
Please note: the
bond is not tax free but it does give you the option to defer tax until the
bond is fully cashed in.