NU with-profits promise to repay assets at 5th birthday

Following the success of NU’s guarantee on the existing with-profits fund – which allows withdrawals on the 10th anniversary – Norwich Union says it will launch a new fund on February 7th which allows the investor to receive all of their original capital if they hold the funds for the full five years then move it all on or within two weeks after the fifth anniversary.

Keith Simm, NU’s investment marketing manager, says commission paid by the client towards the portfolio bond investment will be repaid at the five year date if the client chooses to withdraw investment on the five–year birthday and markets are such the guarantee kicks in.

Although identical to the existing with-profits fund, investment with the guarantee will cost an extra 0.5% in charges for the first five years of the investment through the portfolio investment bond and it is not possible to make switches or additional investments into the fund.

An exit penalty will be imposed if assets are withdrawn before the fifth birthday, increased by 1% during the first three years, however, NU is also offering an extra 1% allocation on all new investments in the portfolio bond until the life insurer decides to withdraw the offer.

Similarly, investment could be made as part of the NU International core funds bond and NUI with-profits bond and the firm will reduce the guaranteed investment amount by the number of units encashed in situations where assets are withdrawn before each five-year anniversary.

Minimum investment in the portfolio bond is £5,000 and clients have access to 31 internal funds and 51 external funds.

IFAonline

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• Topics
• Investment
• Norwich Union
• guarantee
• exit penalty