If you're considering setting up regular withdrawals from your investment bond or changing your withdrawal amount, we'll be happy to help. Please be sure you understand all your options and the effect of any changes you make. There are a few things you and any other plan owner should think about before you make any decisions.
If you have any questions once you've read this summary, or need any help understanding your options - just call us on 0345 640 1000 or +44 178 644 8844 if you're calling from abroad.
An investment bond is a lump sum investment intended to be held over the medium to long-term which invests in a range of funds. Bonds are usually split into a number of segments, which gives you options when you want to access your cash.
The value of your investment can go down as well as up and you may not get back the amount you put in.
You’ll need to think about the following:
Some plans offer alternative withdrawal options, for example distribution bonds will allow you to withdraw the distribution income while with-profits investments will allow you to align regular withdrawals with any annual bonus achieved within your plan – we’ll be happy to discuss these with you if you get in touch.
As an alternative to regular withdrawals, you could consider:
There are some important things to consider before making withdrawals:
Whether withdrawals from your plan will result in a tax liability will depend on a number of factors including your personal tax position and the timing and amount of any withdrawals.
You can withdraw up to 5% each year of the amount you have paid into your bond without paying any immediate tax. This 5% limit is cumulative so any unused part can be carried forward to future years (the total can't be more than the amount paid in). If you take more than this you could create a tax liability.
There’s more information in our guide to tax on your investment bond.
Tax rules are complex and require careful consideration and the impact will depend on your individual circumstances. Taxation, legislation and HM Revenue & Customs practice is liable to change without notice. You may want to seek advice.
According to Action Fraud, the UK’s fraud and internet crime reporting centre, an estimated £1.2bn is lost to investment scams every year. So if you’re thinking of reinvesting the money from your plan, take a minute to find out how to stay ahead of the scammers.
Give us a call on 0345 640 1000 or +44 178 644 8844 if you’re calling from abroad. We can’t give you advice or make your decision for you, but we’ll be happy to help you understand your plan and talk you through all your available options and their possible implications.
Alternatively, speak with a financial adviser - if you don’t have one, you can get details of financial advisers in your area from pru.co.uk and selecting ‘Contact a Financial Adviser’. Financial advisers will charge you a fee for any advice they give you, but it will be personal to you.
We’re here 8am - 6pm Monday to Friday and happy to help in any way we can. Please make sure you have your plan number to hand when you call.