From 26 June, investors will benefit from enhancements to Norwich Union’s range of investment bonds - the Bicentenary Bond, Norwich FlexiBond and the Norwich Bond 2000.
From 26 June, investors will benefit from enhancements to Norwich Union’s range of investment bonds - the Bicentenary Bond, Norwich FlexiBond and the Norwich Bond 2000.
The enhancements include:
- Improved terms for investments of Ł15,000 up to Ł25,000 for the Bicentenary Bond and Norwich FlexiBond.cc
- The opportunity to take out additional bonds, with enhanced guaranteed extra bonuses linked to the size of the original investment in the Bicentenary Bond and the Norwich Bond 2000.
- Increased investment choice for Bicentenary Bond and Norwich FlexiBond customers with the addition of four new funds; the Higher Income Bond, Ethical UK Equity, UK Equity Income and UK Growth funds.
- The extension of the age limits under the Bicentenary Bond and Norwich FlexiBond. Now available from birth to age 90.
- Reduced early cash in charge under the Norwich Bond 2000 for years 3,4 and 5.
Julie Chong, Norwich Union’s marketing manager (investment bonds), commented, "This package of enhancements will make our bonds even better value for investors.
"The improved terms for investments of Ł15,000 up to Ł25,000 for the Bicentenary Bond and Norwich FlexiBond make these products even more appealing to investors.
"The ability to make additional investments to the Norwich FlexiBond has proved very popular, so we’ve extended this to our other bonds. Bicentenary Bond and Norwich Bond 2000 investors can now buy additional bonds and will benefit from an enhanced guaranteed extra bonus rate. The rate will be based on the original investment, rather than just on the additional lump sum."
Chong explained, "For example, if a Bicentenary Bond customer, who originally invested Ł50,000, buys an additional bond for Ł5,000, they will benefit from a guaranteed bonus rate of 4.2 per cent on the additional amount, rather than 0.5 per cent which would apply to a single Ł5,000 investment."
All existing Bond 2000 investors and holders of Bicentenary Bonds bought from September 1999 onwards, can take advantage of this additional bond feature.
The investment choice under the Norwich FlexiBond and Bicentenary Bond has been extended with the addition of four new funds, bringing the total number to 22. Investors can now opt for Norwich Union’s UK Equity Income Fund which has returned first quartile performance in the first three months this year and the UK Growth Fund which has consistently achieved leading performance with top decile returns over 3 and 6 months, and 1, 3 and 5 years.*
The Higher Income Bond Fund is a high yielding corporate bond fund which is invested in a portfolio of high yielding bonds both in the UK and internationally. And the increasing demand for ethical investment philosophy and good performance has been met with the addition of the Ethical UK Equity Fund.
For more information on Norwich Union’s investment bonds readers should speak to their independent financial adviser or call Norwich Union on 0345 606 606.
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Press contact: Liz Nicholson 01603 688 263.
*Source: Hindsight Basis: bid to bid net income reinvested - performance figures related to the underlying OEICs.
The Norwich Bond 2000 – product summary
The Norwich Bond 2000 is a lump sum investment bond which invests in the With-Profits Fund. The bond is automatically written as a series of up to 250 identical policies with a minimum investment in each of Ł1,000.
Minimum investment: Ł5,000 (Ł10,000 for regular withdrawals)
Guaranteed Extra Bonus#:
| Investment band | Rate (%) |
| Ł100,000 and over | 3.0 |
| Ł50,000 - 99,999.99 | 2.5 |
| Ł20,000 - 49,999.99 | 1.6 |
| Ł15,000 - 19,999.99 | 1.0 |
| Ł5,000 - 14,999.99 | 0.0 |
Headline rate: This consists of the current 5.0% annual bonus rate (which can change at any time), plus a guaranteed extra bonus rate. There are no charges deducted from these headline rates. This applies to a life aged under 80 at outset. Potentially subject to an early cash-in charge in the first 5 years and/or a market adjustment factor.
| Investment band | Rate (%) |
| Ł100,000 and over | 8.0 |
| Ł50,000 - 99,999.99 | 7.5 |
| Ł20,000 - 49,999.9 | 6.6 |
| Ł15,000 - 19,999.99 | 6.0 |
| Ł5,000 - 14,999.99 | 5.0 |
Current annual bonus rate: 5.0%
Additional (terminal) bonus:** 1.25% for monies invested in the With-Profits Fund during 2000, until further notice.
Additional investments:+ Additional investments can be made into a separate bond. Each additional bond may receive a guaranteed extra bonus rate determined by the amount invested in the original bond (this applies to all existing bondholders).
Minimum/Maximum ages: 12-90 attained. No minimum age if plan is written on a life of another basis and in trust for the benefit of a child. Maximum age applied to the youngest life on a joint life policy.
Loyality bonuses: 3.25% loyalty bonus rate will be applied against the number of units remaining in the bond on the business day prior to the tenth anniversary and on the business day prior to every subsequent fifth anniversary. The bonus will be paid by the addition of units.
Death benefit: 101% of the sum of the value of units plus any additional bonus. No early cash-in charge or market adjustment factor will apply. Joint life bonds will be written on a second death basis.
Regular withdrawals: Maximum: 6.5% a year of either:
- the original investment specified at outset, or
- the value of units plus any allowance for additional bonus at the time we receive the request.
Minimum withdrawal is Ł50 for each payment taken monthly, quarterly, termly, half-yearly or yearly. Withdrawals can only be taken on the 1st or 15th of each month and are free from the application of the early cash-in charge and any market adjustment factor.
Fund Management Charge: Currently 1.5% each year taken daily is allowed for when annual and additional bonus rates are declared for the With-Profits Fund. No units are encashed to pay for this charge.
Allocation rates:
| Age attained | % of investment used to buy units |
| Up to age 79 | 100 |
| Ages 80-90 | 98 |
If written on joint life basis, the allocation rate is determined by the youngest life.
| Early cash-in charge: | Year of encashment % |
| 1 | 9.0 |
| 2 | 8.0 |
| 3 | 6.0 |
| 4 | 3.0 |
| 5 | 1.0 |
| 6 onwards | nil |
Buying/selling spread: Nil
The Norwich FlexiBond – product summary
The Norwich FlexiBond is a lump sum investment bond which allows investment in up to 12 funds from a choice of the With-Profits Fund, three managed funds and 18 investment linked funds. The bond is automatically written as a series of up to 250 identical policies with a minimum investment in each of Ł1,000.
Minimum investment: Ł5,000 (Ł10,000 for regular withdrawals)
Minimum/Maximum ages: 12-90 attained. No minimum age if plan is written on a life of another basis and in trust for the benefit of a child. Maximum age applied to the youngest life on a joint life policy.
Current annual bonus rate for the With-Profits Fund: 5.0%
Additional (terminal) bonus** 2.0% for monies invested in the With-Profits Fund during 2000, until further notice.
Allocation rates:
| Investment | % of investment used to buy units++ |
| Ł50,000 and over | 103.00 |
| Ł25,000 - 49,999.99 | 102.75 |
| Ł15,000 - 24,999.99 | 102.25 |
| Ł5,000 - 14,999.99 | 100.00 |
Add-ons: Additional investments can be made to the original bond, the allocation rate of which will be determined by the amount of the initial investment and the age attained at the time the additional investment is made (this will be the youngest life joint life cases).
| Initial investment | % of additional investment used to buy units++ |
| Ł50,000 and over | 102.75 |
| Ł25,000 - 49,999.99 | 102.75 |
| Ł15,000 - 24,999.99 | 102.25 |
| Ł5,000 - 14,999.99 | 100.00 |
Death benefit: 101% of the sum of the value of units at their selling price, plus any additional bonus. No early cash-in charge or market adjustment factor will apply. Joint life bonds will be written on a second death basis.
Regular withdrawals: Maximum: 7.5% a year of either:
- the original investment, or
- the value of units at their selling price plus any allowance for additional bonus at the time we receive the request.
Minimum withdrawal is Ł50 for each payment taken monthly, quarterly, termly, half-yearly or yearly. Withdrawals can only be taken on the 1st or 15th of each month and are free from the application of the early cash-in charge and any market adjustment factor.
Buying/selling spread: 5%
Fund Management Charge: Currently 0.75% each year taken daily on all funds with the exception of the With-Profits Fund and three managed funds. Managed funds do not have a management charge as such, but each of the funds in which they invest is subject to the 0.75% charge each year. A similar charge is allowed for when bonus rates for the With-Profits Fund are declared.
Fund switching: In each plan year: two free switches between funds. The next 10 switches are charged at Ł20 each. Any further switches will be charged at 0.5% of the switch value subject to a minimum of Ł20.
| Early cash-in charge: | Year of encashment % |
| 1 | 5.0 |
| 2 | 4.0 |
| 3 | 3.0 |
| 4 | 2.0 |
| 5 | 1.0 |
| 6 onwards | nil |
The early cash-in charge is calculated from the start date of the bond.
It will not apply separately to additional investments.
The Bicentenary Bond – product summary
The Bicentenary Bond is a lump sum investment bond which allows investment in up to 12 funds from a choice of the With-Profits Fund, three managed funds and 18 investment linked funds. The bond is automatically written as a series of up to 250 identical policies with a minimum investment in each of Ł1,000.
Minimum investment: Ł5,000 (Ł10,000 for regular withdrawals)
Minimum/Maximum ages: 12-90 attained. No minimum age if plan is written on a life of another basis and in trust for the benefit of a child. Maximum age applied to the youngest life on a joint life policy.
Current annual bonus rate for the With-Profits Fund: 5.0%
Additional (terminal) bonus** 2.0% for monies invested in the With-Profits Fund during 2000, until further notice.
Guaranteed extra bonus rate :# This applies to both the With-Profits Fund and the investment linked funds. The extra bonus will be applied on the business day before the first policy anniversary and is paid by adding extra units.
| Investment band | Rate(%) |
| Ł100,000 and over | 4.4 |
| Ł50,000 - 99,999.99 | 4.2 |
| Ł25,000 - 49,999.99 | 3.4 |
| Ł15,000 - 24,999.99 | 2.75 |
| Ł5,000 - 14,999.99 | 0.5 |
Headline rate (With-Profits Fund only) This consists of the current 5.0% annual bonus rate (which can change at any time) plus a guaranteed extra bonus rate. The headline rate will be reduced by the monthly limited administration charge and/or a market adjustment factor.
| Investment band | Rate (%) |
| Ł100,000 and over | 9.4 |
| Ł50,000 - 99,999.99 | 9.2 |
| Ł25,000 - 49,999.99 | 8.4 |
| Ł15,000 - 24,999.99 | 7.75 |
| Ł5,000 - 14,999.99 | 5.5 |
Additional investments+: Additional investments can be made to a separate bond. Each additional bond may receive a guaranteed extra bonus rate determined by the amount invested in the original bond. Any Bicentenary Bond bought after September 1999 will be eligible.
Death benefit: 101% of the sum of the value of units at their selling price, plus any additional bonus. No early cash-in charge or market adjustment factor will apply. Joint life bonds will be written on a second death basis.
Regular withdrawals: Maximum: 6.5% a year of either:
- the original investment, specified at outset or
- the value of units plus any allowance for additional bonus at the time we receive the request.
Minimum withdrawal is Ł50 for each payment taken monthly, quarterly, termly, half-yearly or yearly. Withdrawals can only be taken on the 1st or 15th of each month and are free from the application of the early cash-in charge and any market adjustment factor.
Limited administration charge: A monthly limited administration charge of 0.105% of the value of units, including any additional bonus, will be deducted over the first five years. It is paid for by cancelling units from the start date.
Fund Management Charge: Currently 0.75% each year taken daily on all funds with the exception of the With-Profits Fund and three managed funds. Managed funds do not have a management charge as such, but each of the funds in which they invest is subject to the 0.75% charge each year. A similar charge is allowed for when bonus rates for the With-Profits Fund are declared.
Allocation rates:
| Age attained | % of investment used to buy units |
| Up to age 74 | 100 |
| 75 - 79 | 99 |
| 80 – 90 | 98 |
If written in a joint life basis the allocation rate is determined by the youngest life.
Fund switching: In each plan year: two free switches between funds. The next 10 switches are charged at Ł20 each. Any further switches will be charged at 0.5% of the switch value subject to a minimum of Ł20.
| Early cash-in charge: | Year of encashment % |
| 1 | 8.0 |
| 2 | 7.5 |
| 3 | 6.0 |
| 4 | 4.0 |
| 5 | 2.0 |
| 6 onwards | nil |
Important Notes:
**Additional (terminal) bonus is not guaranteed and can be changed or removed at any time. The bonus will be applied on a pro-rata basis, calculated daily, for units invested for less than one year. It will be added to the units cancelled from the With-Profits Fund for regular withdrawals, partial/full encashments and on death.
+Additional investments cannot be made to the Bicentenary Bond or Norwich Bond 2000. However, if an additional bond of the same type is taken out and it is advantageous, the guaranteed extra bonus rate will be based on the amount invested into the existing bond rather than into the new one. This would be where the amount invested in the additional bond is not more that that invested in the existing bond.
If there is more than one existing bond of the same type then the additional bond is only related to the investment in one of them, not the total.
These are the current terms for additional bonds which can be changed or withdrawn at any time. A period of one month must elapse between the issue of the cancellation notice for the original bond and taking out the additional bond. The original policy must be in force. The terms and conditions for each additional bond will be those applying at the time of the additional bond, not when the existing bond was taken out. The additional bond feature does not apply to existing Bicentenary Bonds started before 1 September 1999.
++Allocation rates for ages 75-79: 1% less on all tiers.
Allocation rates for ages 80- 90: 2% less on all tiers.
If written on a joint life basis, the allocation rate is determined by the youngest life.
#The rate of extra bonus will depend on the investment made to the whole bond and it will be paid by the addition of extra units. For each individual in-force policy in the bond the rate shown will be multiplied by the investment amount, less all withdrawals up to the end of the previous business day. For the Bicentenary Bond the result will be used to buy units split between funds in proportion to the value of funds held.
Investment bonds are designed as a medium to long term investment and should not be viewed as a short-term commitment.
To protect remaining with-profits single investment bond policyholders we may apply a market adjustment factor, which will reduce what you get back from the With-Profits Fund. We may do this if policyholders cash in all or part of the bond, except for regular withdrawals. It will depend on investment factors at that time.
Future bonus rates for the With-Profits Fund are not guaranteed and may vary.
If cash is taken from the bond within the first 5 years, we will apply an early cash-in charge, except for regular withdrawals and on death. The early cash-in charge is calculated as a percentage of the cancelled units, after any allowance for additional bonus and market adjustment factor. The percentage applied depends on the year of cashing in.
The value of investment linked funds and any income from them can go down as well as up.
Past performance is not necessarily a guide to the future.
Full written terms and conditions of Norwich Union’s bond are available on request.
Norwich Union Life & Pensions Ltd is regulated by the Personal Investment Authority.