YOUR GUIDE TO

THE INVESTMENT BOND

 CONTENTS
Welcome to the Investment Bond 03

Managing your Bond 04

Investment choice 06

Summary and charges 07

Tax and your Bond 08

YOUR GUIDE TO THE INVESTMENT BOND 2 of 10

WELCOME TO THE
INVESTMENT BOND
We have written this guide to help you understand how the Investment Bond (‘Bond’) works
and to highlight its features.
This guide is not designed to provide you with advice on What are the features of the Bond?
the suitability of this investment as this will depend on your
Our Bond offers a wide fund choice and flexibility,
personal circumstances, approach to risk and how long you
so you can tailor it with the aim of meeting your
are looking to invest for. You should not make
individual needs.
a decision to invest on the basis of this information alone
and should seek professional financial advice. • Access to a range of investment funds.
You should also read: • Move and access your money easily. We currently
impose no fund switching or early cash-in charges.
• The Key Features of the Investment Bond For more information on switching and withdrawals
• Your personal illustration provided by your please see the ‘Managing your Bond’ section on
financial adviser page 4.
• The Investment Bond Fund List • Your Bond is split into independent policies. You can
• The Policy Provisions of the Investment Bond then group those policies into different segments,
each having different funds and different withdrawal
What is the Bond? strategies. See page 4 for more details.
The Bond is designed for investing a lump sum over the • A full range of Adviser Charging options are available,
medium (at least 5 years) to long-term (over 10 years) and allowing payment directly from the bond to be
includes a small element of life assurance, also known as made. For more information please see page 10 of
life cover. It is now only open to existing Bond holders. this document (Adviser Charges and Impact on 5%
It aims to increase the value of your investment and can Withdrawals) and section 3.3 (Adviser Payments)
also provide regular or one-off withdrawals. It may not be of the Policy Provisions of the Investment Bond for
suitable if you wish to invest for a short period of time or if further information.
you need instant access to your cash.
The Bond allows you to spread risk, as you can – within just
one product – hold a variety of funds investing in different
asset classes such as Money Market, Gilts and Bonds,
Property and Shares.
The Bond can be a tax effective way of investing depending
on your individual circumstances – your financial adviser
will be able to help you determine whether it is right for you.
Taxation of the Bond is covered in more detail on pages 8
to 9.
You need to be aware that the value of your investment can
fall as well as rise and is not guaranteed. You could get back
less than you invest.

YOUR GUIDE TO THE INVESTMENT BOND 3 of 10

MANAGING YOUR BOND

Investment flexibility Each segment is treated as an independent policy. You can

have different investment amounts, different funds and
Your investment objectives may change over time. We
different withdrawal amounts across the segments within
have built flexibility into the Bond to let you and your
your Bond. You can’t add to, or change, the number of
financial adviser adapt your investment strategy as your
needs change. segments in your existing Bond.

You can currently switch between funds for free and make We must remind you the value of your investment can fall
additional investments of £1,000 or more at any time. There as well as rise, is not guaranteed and you could get back
is no upper limit to how much you can invest. less than you invest.

Please bear in mind Saving you time with automated options

With increasing demands on your time, you and your
Additional investments will form part of your original Bond,
financial adviser can take advantage of automated options
however, you will have cancellation rights (as explained
that make it easier to manage your Bond.
in the Key Features of the Investment Bond) in
relation to any additional investment amounts. Additional Drip-feeding
investment amounts will be subject to our standard terms
and conditions in operation at the date we receive them. This option allows you to gradually move from your
Please be aware that the value of additional investments, current fund choice to a different set of funds over time,
as well as existing amounts, can fall as well as rise and is with the aim of smoothing the ups and downs of a
not guaranteed. stockmarket investment.
We may increase the minimum additional investment Drip-feeding can also be useful if you wish to gradually
amount in line with the Retail Prices Index and in certain reduce the risk profile of your investment – for example, in
circumstances we may refuse to accept further investments. preparation for retirement.
We do not currently charge for fund switches, although Portfolio Rebalancing
we reserve the right to impose a charge in certain
circumstances. We also reserve the right to refuse or Over time, the percentage of your Bond invested in each
delay the switching of funds indefinitely under certain fund in your portfolio will change from the percentage you
circumstances. This may be for example, where we have to selected at outset due to the relative performance of each
sell assets held in the funds you are invested in and we are fund. This could result in a portfolio that no longer meets
unable to do this immediately. For more information please your risk profile or investment objectives.
see the Policy Provisions of the Investment Bond. Portfolio Rebalancing enables the proportion invested in
When you make any additional investments there is no each fund to be adjusted back to the selected percentages.
maximum age for the lives assured. You can choose to apply Portfolio Rebalancing on a
monthly, quarterly, half-yearly or annual basis and it can be
Rewarding loyalty started or stopped at any time.
To reward you for investing with us over the longer term, we Portfolio Rebalancing can be useful to maintain different
will add a loyalty bonus of 0.5% of your Bond’s cash value on risk profiles for specific Bond segments. This can save
its 10th anniversary. The cash value is what your Bond would administration time, for example if the Bond is held
be worth if it was cashed-in on its 10th anniversary. This under Trust.
bonus does not apply to additional investments received after
the 8th anniversary. The Bond has no fixed term and will Please bear in mind
continue after the 10th anniversary. Using Drip-feeding or Portfolio Rebalancing could result
in units being sold from funds that subsequently perform
Segment your Bond to meet a range of well and switched into funds that perform less well. This
investment objectives may mean that the value of your Bond would have been
We recognise that you are likely to have a variety of higher at that particular time had Drip-feeding or Portfolio
investment objectives and needs. So we’ve designed the Rebalancing not been applied.
Bond so you can use the existing independent segments to
There is no guarantee that Drip-feeding or Portfolio
meet different objectives and manage them accordingly.
Rebalancing will be beneficial to the value of your Bond.
For example, you could invest an existing segment in Ask your financial adviser whether either of these options
a range of funds aiming for growth to fund a child or may be suitable for you.
grandchild’s future educational costs, a different segment
for a future inheritance, one for a future personal income, or
a more conservative portfolio for medium-term needs.

YOUR GUIDE TO THE INVESTMENT BOND 4 of 10

Access to your money you can withdraw up to 10% in the following year
The Bond can be used to provide a regular ‘income’ or to with no immediate tax liability, regardless of your tax
fund future expenditure. You can set up regular withdrawals position. When you fully cash-in your Bond, previous
at any time by giving us 30 days’ notice. withdrawals taken from the individual policies will be
included when calculating income tax payable on any
One-off withdrawals can be taken as a fixed amount or a
chargeable gain on your Bond.
percentage of your overall investment or can be taken from
specific segments/policies. • The 5% allowance applies to every additional
investment as well as the initial investment. Each
There is no minimum or maximum withdrawal amount
additional investment gives the policy an additional 5%
but you must leave at least £5,000 in your Bond. This
allowance, based on the amount of the investment.
does not apply if you are fully cashing-in a segment or to
certain withdrawals if your Bond is held under a Discounted • If you withdraw more than 5% per year of the initial
Gift Trust – see the ‘Withdrawals’ section of the Policy amount invested within each policy, you may be
Provisions of the Investment Bond for details. subject to an immediate tax liability. It is important to
note that any adviser charging payments paid from the
We do not apply any exit charges – you can cash-in your
policy will count towards the 5% annual allowance.
Bond, or individual policies within the Bond, at any time.
We reserve the right to delay payment indefinitely under • Tax treatment is subject to change and individual
certain circumstances. This may be for example, where we circumstances.
have to sell assets held in the funds you are invested in and • If you take withdrawals based on a percentage of
we are unable to do this immediately. Please refer to the fund value, the value of the withdrawals can fall and
‘Investment Matters’ section of the Policy Provisions of rise in line with the value of your Bond.
the Investment Bond for full details.

There are some important points you need For more information about the tax treatment of
to consider before making a withdrawal: the Bond and the implications of taking withdrawals,
• Taking withdrawals (or paying adviser charges) from please see the ‘Tax and your Bond’ section on
your Bond reduces its value. The value will therefore page 8.
fall below the original investment amount if the
amount taken is more than any growth of your fund
after deductions. This is especially true if you take
Checking the value of your Bond
withdrawals (or adviser charges) immediately at the
start of your Bond. Each year we will send you a valuation statement to keep
you up-to-date with the value and performance of your
• From a legal and taxation point of view any
Bond. You can also request your valuation over the phone
withdrawal (or payment of adviser charges) taken
at any time from our customer services team by using the
from the Bond is considered a withdrawal of
contact details on the back page.
capital. It is subject to special income tax rules
for calculating and assessing whether there is any You can also take an active part in your investment by using
income tax liability due on any profit you make our online services at phoenixwealth.co.uk where you can:
(known as a chargeable gain). Any chargeable gain
• view the current value of your Bond
that you make on withdrawals will be free from
capital gains tax, as well as the starting and basic • check the daily price of units in your fund or funds
rates of income tax. If you fall within the higher or • check and change your personal details
additional tax rate bands you may have an income • switch funds.
tax liability.
Bonds fully or partially under Trust are not available online.
• You can withdraw up to 5% per year of the initial
amount invested within each policy for a period of
Tax and inheritance planning
20 years (including any adviser charges), or if you
take less than 5% per year, until the value of the Your Bond will continue until the death of the last life
original investment amount has been fully withdrawn. assured. With this in mind, assuring more than one life can
Provided this amount is not exceeded, there will be provide more control over when the Bond is eventually
no income tax payable at the time of each withdrawal cashed-in, which can assist in tax and investment planning.
as tax on these amounts is deferred until final cash-in. Inheritance tax and estate planning are complex areas. You
This 5% allowance is cumulative, which means, for should speak to your financial adviser to find out whether
example, you can withdraw 4% per year for 25 years; holding your Bond under trust may be suitable for you.
or if you do not use your 5% withdrawals in one year,

YOUR GUIDE TO THE INVESTMENT BOND 5 of 10

INVESTMENT CHOICE

Investing made simple

Why invest with us? The funds are researched, selected and monitored by
the investment professionals at Aberdeen Standard
We’re specialists in wealth management, and that
Investments (ASI) who follow a rigorous process of
means we’re always looking to provide options that
Intelligent Investment Choices blending together some of the best known funds in a single
best suit your financial plans.
portfolio fund.

Managed solutions Researched fund range Tailored Selection

Tailored Selection is an exclusive range of funds, all
Liontrust Multi-Asset
hand-picked by investment experts.
funds Tailored This range of funds from some of the leading fund
Selection investment houses is designed to give you the focused
Phoenix Wealth
choice you need. Working with your adviser, you will be able
Elite funds
to create a complete portfolio to match your attitude to risk.

Liontrust Multi-Asset funds Showcase funds

For your varying investment goals, there are three risk A small number of specialist funds within Tailored Selection –
profiled multi-asset fund ranges offering investment styles aiming to bring something a little different to your portfolios.
that are either; Active - actively managed by the fund These funds have been selected not only for their
manager on a daily basis to try and beat the fund’s target or management style and performance potential but also as
benchmark; Passively managed - also known as tracker funds an interesting investment opportunity that you may wish to
where a certain benchmark is tracked (for example the FTSE explore with your adviser.
100 index); or, Blended which as the name suggests are a
blend of actively and passively managed funds. About Aberdeen Standard Investments (ASI)
Phoenix Wealth Elite funds ASI is the investment arm of Standard Life Aberdeen plc,
one of the world’s largest investment companies.
Elite Fund of Funds can be a good way for you to spread
risk and increase your chances of making a good return, Comprised of highly experienced portfolio managers and
although there are no guarantees. They are expertly fund analysts, the team at ASI has a strong reputation for
managed by investment specialists, Aberdeen Standard managing fund of funds, combined with considerable scale
Investments (ASI). You can choose from: and investment expertise.

Managed Funds - a range of six ready-made portfolios

that cater for different attitudes to risk, consisting of funds
managed by some of the best investment experts around. The value of investments can go down as well
Sector Funds - a range of nine funds that let you get really as up. You could get back less than you invest.
hands-on and choose a portfolio from funds selected by
our experts.
Elite Diversified Markets - a range of six funds of funds,
managed by leading investment experts. They track the
market, across a number of different benchmarks, so that
your investments are diversified. And they come with cost-
effective charges.

YOUR GUIDE TO THE INVESTMENT BOND 6 of 10

SUMMARY AND CHARGES

We offer a clear charging structure so you can see exactly what you get
for your money.

A quick summary

Allocation 100% (98% if youngest life assured is 80 or over)

Fixed term None

Annual Fund Management Charge Variable depending on fund selected

Fund Expenses Variable depending on fund selected

Switch charge None

Early cash-in charge None

Additional investments No entry charge

Withdrawals No charge to make regular and one-off withdrawals

Charges
General information about the charges you may incur is
detailed in the Key Features of the Investment Bond.
Specific information about the charges you will have to
pay will be given to you by your financial adviser in your
personal illustration.
We reserve the right to impose or amend our charges
in accordance with the Policy Provisions of the
Investment Bond.

Paying your Adviser

If you agree to pay your financial adviser for advising you on
this investment, you can do this in one of two ways:
• You can choose to make a payment directly to your
financial adviser (separately from your investment in
the Bond) or
• You can choose to pay them a fee which is taken
from your Bond.

YOUR GUIDE TO THE INVESTMENT BOND 7 of 10

TAX AND YOUR BOND

It is important to know exactly what you are investing in and how your
investments may affect the amount of tax you have to pay.

The following information is based on our The way the tax is calculated depends on your individual
interpretation of the current law and HM Revenue circumstances and how you take money out from
& Customs’ (‘HMRC’) practice. Tax rates and rules your Bond.
could change in the future and tax details are subject
• Partial (one-off and regular) withdrawals – you may
to personal circumstances so it might help you to
have an immediate tax liability on any withdrawals
review this section with your financial adviser.
(combined with any adviser charges paid from the
policy) above the 5% annual withdrawal allowance at
Income tax and capital gains tax
the time you make these withdrawals.
As the Bond is a life assurance contract, you will not
• Full cash-in of one, all or a number of policies – the
normally be liable to pay capital gains tax or the basic rate
tax calculation is slightly different and takes into
of income tax on any growth in your Bond.
account any profit made on the policy and any
Tax is paid on income and gains within the funds we offer amounts you have previously withdrawn (including
and this is reflected in our funds’ unit prices. Regardless of any adviser charges paid from the policy). This
your tax status, you will not be able to reclaim any of this calculation is explained on the next page.
tax from HMRC.
Taking withdrawals and adviser charges from your Bond
If you are a higher or additional rate taxpayer when you take reduces its value. The value will therefore fall below the
money from your Bond, you may have to pay income tax original investment amount if the amount taken is more
on any chargeable gains. The tax payable would be limited than any growth of your policy after charges.
to the difference between either the higher and basic rate
(currently 20%) or the additional and basic rate (currently 5% annual withdrawal allowance
25%), depending on which category you fall into. You can withdraw up to 5% per year of the initial amount
If you don’t pay tax, or if you are a basic rate taxpayer when invested within each policy for a period of 20 years (including
you withdraw money from your Bond, any chargeable gain any adviser charges), or if you take less than 5% per year,
(for example, if you withdraw more than your 5% annual until the value of the original investment amount has been
allowance when taking all withdrawals and any payments fully withdrawn. Provided this amount is not exceeded,
towards adviser charging into consideration) may take you there will be no income tax payable at the time of each
over the upper level of the basic rate income tax limit. withdrawal as tax on these amounts is deferred until final
cash-in. This 5% allowance is cumulative, which means, for
In this case you would become a higher or additional example, you can withdraw 4% per year for 25 years; or if
rate taxpayer. you do not use your 5% withdrawals in one year, you can
For Bonds taken out on or after 6 April 2013, any chargeable withdraw up to 10% in the following year with no immediate
gain may be reduced if you are resident outside of the UK tax liability, regardless of your tax position. When you fully
for any period whilst you have your Bond. cash-in your Bond, previous withdrawals taken from the
individual policies will be included when calculating income
The actual amount of tax payable could be less due to tax payable on any chargeable gain on your Bond.
‘top slicing relief’. This is a complex area to explain and is
beyond the scope of this document. The 5% allowance applies to every additional investment
as well as the initial investment. Each additional investment
Tax rates and rules could change in the future and tax gives the policy an additional 5% allowance, based on the
details are subject to personal circumstances. amount of the investment.
It might help you to review this section with your financial
adviser who can provide more details where appropriate.

YOUR GUIDE TO THE INVESTMENT BOND 8 of 10

 Cashing-in policies – calculating the
Adviser charges and impact on chargeable gain
5% withdrawals Calculating the chargeable gain and the average gain, and
Any adviser charges taken from your Bond count therefore any income tax liability, on cashing-in policies, or
towards your 5% annual withdrawal allowance. This when the last life assured dies, involves three steps.
means there may be an immediate tax liability if your
withdrawals, combined with any adviser charges, are Step 1
above 5% of the initial amount invested. The chargeable gain is worked out by using the formula (A-
B) + (C-D) where:
If ongoing adviser charges are taken as a
percentage of the bond’s value and that value
increases, the actual amount of the ongoing adviser A Is the cash-in value of the policies cashed-in.
charge will also increase.
B Is the amount invested in the policies cashed-in,
including any extra investments.
Personal allowance/tax credits
Most people have a personal income tax allowance, C Is the total of those amounts previously
whereby you do not have to pay tax on any income up to withdrawn (including any adviser charges) from
that allowance. Your financial adviser will be able to tell you the policies cashed-in.
the current tax year allowance.
D Is the total of the amounts previously withdrawn
Please note (including any adviser charges) that are above
the 5% entitlements you are allowed, from the
• Any chargeable gains from your Bond in a given
policies cashed-in.
tax year are included in your total income for
certain purposes. This may affect your entitlement
to allowances such as age related income tax Step 2
allowance, child tax credits or working tax credits. The average gain is calculated by dividing the chargeable
• Your personal income tax allowance will be reduced gain by the number of complete years you have held the
by £1 for every £2 you earn over £100,000, until all policies that are being cashed-in.
your allowance has been used. For example, if you
earn £110,000, then your allowance will be reduced Step 3
by £5,000. The tax is calculated on the average gain, and (after
deducting a credit for basic rate tax) the result is then
Chargeable events multiplied by the number of complete years you have held
The following scenarios are known as ‘chargeable events’ the policies to find the tax payable on the chargeable gain.
and may trigger an immediate income tax charge. So you could reduce or eliminate any liability to income tax
• If you cash-in one or more of the policies within on the chargeable gain if you cash-in policies when income
your Bond. is low, for example after retirement.
• If you withdraw more than your cumulative 5% If you die, any death benefit payable under the terms of
allowance in any Bond year when combined with the Bond in addition to its cash-in value is not treated as a
any payment for adviser charges. chargeable gain. This means the additional amount is free of
• If you decide to change the ownership of all any liability to income tax and capital gains tax.
or part of your Bond for money or money’s worth
(whereby money or an equivalent is paid in exchange
for ownership).
• If there is a death giving rise to the payment of death
benefits under your Bond.

YOUR GUIDE TO THE INVESTMENT BOND 9 of 10

FINANCIAL ADVISER
For more information about the Investment Bond and the options available to you, please speak
to your financial adviser.
Please note that financial advisers use a variety of different ways to charge you for their services
and you will be liable for any charges incurred. Please ask your financial adviser for full details of
these charges.
If you do not have a financial adviser and would like to speak to one in your area, you can visit
unbiased.co.uk.

CONTACT US
If you want more information about the Investment Bond please:

Call us on 0345 129 9993

Available 8.30am – 5.30pm, Monday to Friday. As part of our commitment to quality service
and security, telephone calls may be recorded.

Email us at [email protected]
Please be aware that emails are not secure as they can be intercepted, so think carefully
before sharing personal or confidential information in this way.

Visit us here phoenixwealth.co.uk

Write to us at
Phoenix Wealth, Unit Linked Life & Pensions, PO Box 1393, Peterborough, PE2 2TP

Phoenix Life Limited, trading as Phoenix Wealth, is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority
and the Prudential Regulation Authority. Phoenix Life Limited is registered in England No. 1016269 and has its registered office at: 1 Wythall Green Way,
Wythall, Birmingham, B47 6WG.

PH_LB0019 | November 2020