Investment Bonds
Investment bonds are life insurance policies where you invest a lump sum in a variety of available funds. Some investment bonds run for a fixed term, others have no set investment term. When you finally cash investment bonds, the sum you receive will be dependent upon the chosen investment performance and if you have made any withdrawals.
Some investment bond providers have funds which guarantee the return of your initial investment, less any withdrawals.
Because there’s an element of life assurance, your investment bond policy might pay out slightly more than the value of the fund if you die during its term. There are also some tax benefits. The main one being you can withdraw of up to 5% a year for up to 20 years without incurring an additional tax charge.
You can usually withdraw some or all of your money whenever you need to, but a surrender penalty might apply if you do so in the first few years.
There is a lot more to know about investment bonds and we would be happy to discuss this with you and provide illustrations and literature. As you build your investments, we will advise how investment bonds can sit within your portfolio and ensure you are already making full use of other tax avoidance products such as ISAs.
Some investment bond providers have funds which guarantee the return of your initial investment, less any withdrawals.
Because there’s an element of life assurance, your investment bond policy might pay out slightly more than the value of the fund if you die during its term. There are also some tax benefits. The main one being you can withdraw of up to 5% a year for up to 20 years without incurring an additional tax charge.
You can usually withdraw some or all of your money whenever you need to, but a surrender penalty might apply if you do so in the first few years.
There is a lot more to know about investment bonds and we would be happy to discuss this with you and provide illustrations and literature. As you build your investments, we will advise how investment bonds can sit within your portfolio and ensure you are already making full use of other tax avoidance products such as ISAs.