Prudential Savings Account / Prudential Investment Bond
Making regular withdrawals from your plan
If you’re considering setting up regular withdrawals from your plan, or changing your withdrawal amount, 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 your plan works
Prudential Savings Account and Prudential Investment Bond are medium to long-term investment plans that accept a mix of regular and one-off payments. They invest in the With-Profits Fund. Both plans also provide a small amount of life and terminal illness cover.
The value of your investment can go down as well as up and you may not get back the amount that you put in.
Things to consider before setting up withdrawals
You can't set up regular withdrawals while making regular payments. Access to regular withdrawals could depend on the amount paid into your plan and when those payments were made. Where regular withdrawals are available there may be a limit to the amount of cash that you can take out. Call us to find out more.
You’ll need to think about the following:
- The amount you wish to withdraw.
- The frequency of withdrawals.
- When you want them to start.
As an alternative to regular withdrawals, you could consider cashing in all or part of your plan.
Things to consider before making your decision
There are some important things to consider before making withdrawals:
- It can create a tax liability – see ‘tax considerations’ below.
- It can impact your personal allowance and entitlement to tax credits.
- There may be a market value reduction which can reduce the value of any withdrawals taken from the fund.
- The minimum regular withdrawal is £50 and your plan may be closed if the value falls below £1,000.
If you took out life cover and/or critical illness cover with your plan, they will be unaffected.
Whether withdrawals from your plan will result in a tax liability will depend on a number of factors including your personal tax position and the timing and amount of any withdrawals.
You can withdraw up to 5% of the original investment every year for the first 20 years of the plan without immediate tax liability. This 5% is cumulative, which means that if you don’t withdraw the full 5% in one year, you can carry the percentage balance forward to future years. You can withdraw more than this but you could have a tax liability.
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.