Why you should review your With Profit Bonds now.

14/03/2011

Many of the largest With Profit bond companies allow investors to cash in their bonds without a Market Value Reduction (MVR).

Many With Profits funds have suffered from a combination of poor management, poor investment returns and over optimistic bonus payments in the past. 

The reserves set aside by many life companies to pay bonuses in the poor years have been badly depleted, so many insurers had little choice but to cut the annual bonuses, or even stop paying them altogether.

Many With Profit Bond Investors are now wondering if they should wait for signs of improvement or cut their losses.

However, many of the largest With Profit bond companies allow investors to cash in their bonds without a Market Value Reduction (MVR) on the 10^th anniversary of their bonds. 

This could effectively mean investors receiving up to 20% more than if encashed outside of the 10^th anniversary.

NB  Before cashing in a with profit bond, it is important to check the penalties and tax implications.

 Paul Dixon – Chartered Financial Planner