Fully or partially cashing in your investment bond
If you’re considering taking some or all of the cash from your bond as a lump sum, we’ll be happy to help. It’s important to note that once you’ve told us what you’ve decided to do, you can’t change your mind. Please be sure you understand all your options, and the effect of any changes you make. There are a few things you and any other plan owner should think about before you make any decisions.
If you have any questions once you’ve read this summary, or need any help understanding your options, just call us on 0345 640 1000, or +44 178 644 8844 if you’re calling from abroad.
How an investment bond works
An investment bond is a lump sum investment intended to be held over the medium to long term which invests in a range of funds. Bonds are usually split into a number of segments, which gives you options when you want to access your cash.
The value of your investment can go down as well as up and you may not get back the amount that you put in.
Your options are either:
Fully cashing in your plan.
- Cashing in part of your plan.
We can explain these options if you get in touch.
As an alternative you might want to consider taking regular withdrawals.
Things to consider before making your decision
There are some important things to consider before fully or partially cashing in your plan:
- It can create a tax liability – see ‘tax considerations’ below.
- It can impact your personal allowance and entitlement to tax credit.
- If you cash in a plan which is invested in the With-Profits Fund this may result in a market value reduction which can reduce the value of any withdrawals taken from the fund.
- You may be subject to early cash in charges.
- Which fund(s) you want to take the cash from.
- If you’re invested in one of the PruFund protected funds any partial cash in will reduce your guaranteed amount.
Whether any tax would be due depends on a number of factors including your personal tax position as well as the timing and amount of money taken out to date.
When cashing in all or part of your plan, you can either cash in whole segments or spread the amount equally across a number of segments. Depending on what you decide to do, this can have different tax implications. There’s more information in our guide to tax on your investment bond.
Tax rules are complex and require careful consideration and the impact will depend on your individual circumstances. Taxation, legislation and HM Revenue & Customs practice is liable to change without notice. You may want to seek advice.
Protecting yourself from investment scams
According to Action Fraud, the UK’s fraud and internet crime reporting centre, an estimated £1.2bn is lost to investment scams every year. So if you’re thinking of reinvesting the money from your plan, take a minute to find out how to stay ahead of the scammers.
What to do now
Give us a call on 0345 640 1000 or +44 178 644 8844 if you’re calling from abroad. We can’t give you advice or make your decision for you, but we’ll be happy to help you understand your plan and talk you through all your available options and their possible implications.
Alternatively, speak with a financial adviser - if you don’t have one, you can get details of financial advisers in your area from www.pru.co.uk and selecting ‘Contact a Financial Adviser’. Financial advisers will charge you a fee for any advice they give you, but it will be personal to you.
We’re here 8am - 6pm Monday to Friday and happy to help in any way we can. Please make sure you have your plan number to hand when you call.