Distribution Bonds

Invest a minimum of £5,000 for the medium to long term

This bond is designed to provide you with a regular income.

It’s flexible, and lets you decide how much you receive and when you receive it. You don’t have to take an income – if you prefer, any growth can be re-invested instead.

We invest the money in assets that are most likely to deliver a regular income, while balancing this with the potential for capital growth. If your needs change, you can switch funds at any time, currently free of charge.

To apply call 0845 272 8810

Overview

The Distribution Bond is designed to be flexible and provide you with a regular income. You can also choose how often to receive an income, which can be:

Every month
Every three months – in February, May, August, November
Every six months – in February and August

If you want a monthly income, the minimum investment amount is £10,000.

You can find full details of our Distribution Bond, including the charges, in the Key features document (239kb)

Investment returns

Investment returns aren’t guaranteed. The value of your investment can go up or down so you may get back less than you paid in.

Find out more

To find out more call us on 0845 272 8810

To apply call 0845 272 8810

How it works

To apply call 0845 272 8810

How it works

Eligibility

You must be aged 18 or over to be a bondholder
You need to be a resident of the UK or Channel Islands
You can insure a life, from 3 months to 84 years
Up to six people can jointly own the bond, and up to six lives can be insured.

Growth isn’t guaranteed and will depend on the performance of your investments and our charges. If the income you take is more than the growth on your bond, some of the original investment will be used to pay for the income distributions. This would reduce the value of your bond.

Making withdrawals

Withdrawals are easy to arrange.

Each year you can withdraw up to 5% of the total payments made into your bond without any immediate tax liability.

This includes any income distributions you take. Once you have taken withdrawals equal to the total amount paid into your bond, this allowance stops. If you don’t use your full 5% allowance in a particular policy year, you can carry it forward, until you have used up the whole allowance. You need to keep at least £300 in your bond for it to remain open.

Withdrawals are subject to an overall limit and will reduce the value of the bond.

Making additional payments

You can make payments whenever you like. These are subject to a maximum age of 84 (life insured) and a minimum additional investment of £1,000.

Switching funds

All of your money will initially be invested in our Distribution Fund However, you can switch into any of our 150 insured investment funds at any time. Switching is currently free of charge. For full details please refer to the Key features document (PDF, 239kb).

Tax

Each year you can withdraw up to 5% of the total payments made into your bond without any immediate tax liability. Tax rules may change.

Once you have taken withdrawals equal to the total amount paid into your bond, this allowance stops.

As mentioned above, if you don’t use your full 5% allowance in a particular policy year, you can carry it forward, until you have used up the whole allowance. You need to keep at least £300 in your bond for it to remain open.

Please note that if you cash-in part or all of your bond, or take withdrawals in excess of 5% of the total amounts paid into your bond in a policy year, part of your benefit may be treated as a ‘chargeable gain’. This is explained in the Key Features Document.