Established 1863

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info@redroseassurance.co.uk

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Investment Bond
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Investment Bond

People who have used their ISA allowance and wish to invest additional lump sums to try to achieve higher returns than from deposit based savings might be interested in the Society’s Investment Bond.

The Investment Bond is designed to help increase the value of a lump sum of £500 or more over the medium to long term (5 years or more).


Main Product Features

  • Tax free

    The return at maturity (or on death during the term) is free of any personal taxation for a basic rate or non-tax payer.

  • With-profits Fund

    Your investment is in our with-profits fund. This is a mixture of equities, gilts, corporate bonds, property and cash. It is important to remember that as a ‘mutual’ we have no shareholders. This means that ALL of our profits belong to our members.

  • Bonuses

    As a member of the Society you share in the annual profits – a bonus is normally added each year which once added, cannot be taken away. Depending on the investment performance a final, or ‘terminal’ bonus may also be paid to ensure all members receive their ‘fair share’ of profits made over the term of the Plan.

  • Income

    If the amount invested is £5,000 or more, a withdrawal of up to 5% of the initial investment can be taken each year with no immediate liability to personal taxes (subject to a maximum of 20 years for a higher rate taxpayer)

  • Life cover included

    In the unfortunate event of the death of the life assured during the term 101% of the Bond’s value will be paid.

Things to consider

You will find more information about the Investment Bond in the key features document and below are some important points that we want you to be aware of:

  • This is a long term investment of 5 years or more. Although you can cash in the Bond before maturity if you need to, you could get back less than you have paid in
  • The annual fee is 1% per annum for the first 4 years, subject to a minimum of 4% if the Bond is encashed within the first 4 years.
  • Once added, bonuses become guaranteed and cannot be taken away. However, in order to protect the remaining members of the with-profits fund, the Society reserves the right to apply a Market Value Reduction to encashments during adverse market conditions, in other words when investments drop in value significantly
  • The value of the Plan will depend upon investment performance
  • Inflation will have an effect on the future purchasing power of your investment
  • HMRC could change the tax status of these types of policy in the future
Investment Bond
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Product Comparison Table

Product
Tax Exempt Savings Plan

Stocks and Shares ISA

Investment Bond
Min prem £10 £25 pm
or £500 initial
£500
Max Prem £25
(a taxable version is available if a higher premium is required)
£20,000
for 2017/18 tax year
Unlimited
Min age at outset 17 18 Birth
Max age at outset 74 None 90
Min term (years) 10 None
but should be considered a medium to long term plan (5 years or more)
None
but should be considered a medium to long term plan (5 years or more)
Max term (years) 30
(but must mature before 85th birthday)
Unlimited Unlimited
Fixed term Yes No No
Flexible contributions No Yes
can add lump sums, amend or stop regular payments and start again later
No
Life cover Sum assured plus all bonuses added to date of death 101% of the ISA value at date of death 101% of the Bond value at date of death
Transferable No Yes
can be transferred from or to another provider
No