Distribution Bond

This bond is designed to provide a growing regular income* over the longer term. Your money is invested in our Distribution Bond Fund which invests in a mix of different assets to produce income.

Twice a year this income is transferred to the Distribution Cash Fund which distributes payments to bond holders. You can choose not to take these distributions and have the income reinvested back into your bond.

Remember that the value of your fund may fluctuate and you may not get back your original investment.

Topping up your investment

You can top-up your bond at any time by completing a Distribution Bond Top-Up Application form and forwarding this, together with a cheque to Prudential, Stirling, FK9 4UE. The minimum top-up amount is £1,000. There is no maximum investment.

Flexible options for withdrawing your money

You can take regular or one off withdrawals* from your bond at anytime. The level of income you can take can be either;

• The level of income built up in your Distribution Cash Fund (i.e. full distribution), or
• An amount of income selected by you (regular withdrawals). If the amount you choose exceeds the growth received the value of your bond may fall.

Tax benefits of the Distribution Bond

If you pay tax, the Distribution Bond has a valuable built-in income tax benefit. This allows you to take out up to 5% of your investment each year of your plan for up to 20 years - free from any immediate income tax liability.

This is based on our current understanding as at May 2010 of tax legislation and HM Revenue & Customs practice, both of which may change without notice. The amount of tax relief actually received will depend on your individual circumstances.

What will I get back?

This depends on many things including investment performance, which can go down as well as up, the length of time your money is invested, any withdrawals, charges and any tax liability that may apply.

*HM Revenue & Customs may not tax these regular payments as income in the same way that dividends or interest are treated.

Read more

Distribution Bond & Top-Up Key Features
Taxation of bonds
Distribution Bond Top-Up Application