UK: Norwich Union launches new with-profit guarantee fund

• It offers fifth anniversary money-back guarantee

Norwich Union is to introduce a new With-Profit Guarantee Fund to meet continuing demand from investors and IFAs.

It guarantees to return a customer’s original investment on the policy’s fifth anniversary regardless of investment conditions. To qualify for the guarantee, investors must hold their investment in the fund for five years and then move the whole investment out of the fund on or within two weeks after the fifth anniversary.

The new fund will be available from 7 February 2005. It replaces the current free fifth anniversary money-back guarantee special offer, which ends on 6 February.

The fund will charge an extra 0.5% p.a. for the first five years of investment. It is available through the Portfolio investment bond (See notes to editors). Early exit penalties might apply if money is withdrawn from the bond before the 5^th anniversary, and it is not possible to switch or make additional investments into the fund.

A With Profit Guarantee Fund will also be available on offshore with-profit investments in the Norwich Union International Core Funds Bond and Norwich Union International With-profit Bond.

In addition to the fifth anniversary guarantee, an extra 1% allocation will continue to be offered on all new investments in Portfolio until further notice. During the offer period exit penalties in the first three years will also be increased by 1%.

Neil Davies, head of investment at Norwich Union, said: "The fifth anniversary money-back guarantee has proved popular with IFAs and investors because it offers customers peace of mind. Sales have been encouraging since the guarantee was offered, and the new fund means we are able to continue to offer the guarantee once the special offer is withdrawn."

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Press office contacts:
David Gwyer 01904 452828 Out of hours 07800 699508
Rob Pell 01904 452659 Out of hours 07800 699563
James Evans 01904 452791 Out of hours 07800 699525

Notes to editors

• Norwich Union is the UK’s largest insurer. It is a leading provider of life, pensions and investment products and one of the leading IFA providers. IFAs provide around 70% of the company’s long-term savings business.
• Norwich Union has strategic alliances with building societies and other leading UK brand names including Tesco Personal Finance and The Royal Bank of Scotland Group.
• Norwich Union’s news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media.

About the Portfolio fifth anniversary money-back guarantee

• The fifth anniversary money-back guarantee will be available through a new fund, the With-Profit Guarantee Fund. This fund is identical to the With-Profit Fund but will charge an extra 0.5% p.a. for the first five years of investment.
• The fifth anniversary money-back guarantee will apply to investments held continuously in the With-Profit Guarantee Fund for five years that are fully withdrawn on, or within two weeks after, the 5^th anniversary. A penalty will be incurred if money is withdrawn from the fund before the 5^th anniversary.
• The guarantee does not apply to the With-Profit Fund or the With-Profit Income Fund.
• If any money is taken out of the fund before the fifth or tenth anniversary through regular withdrawals, one-off withdrawals or switches into other funds, then the amount guaranteed will be reduced in proportion to the number of units cancelled. Any units cancelled to meet charges will not reduce the guarantee.

Norwich Union’s Portfolio investment bond

• Portfolio is Norwich Union’s investment bond. It offers a flexible way to invest for growth or income. Portfolio’s minimum investment is Ł5,000 and investors can choose to put their money in a selection of, with-profit, equity, bond, property, distribution, and cash funds.
• Portfolio also:
• • Offers valuable guarantees - for investments into the With-Profit Fund, there is a 10th anniversary money-back guarantee. The With-Profit Guarantee Fund offers money-back guarantees on the 5^th and 10^th policy anniversaries. On the Guaranteed Fund, there is a money-back guarantee on the 5th anniversary
  • Is flexible - offering a wide choice of internal and external funds and a choice of two charging structures within a single bond
  • Offers a wide range of funds –investors have the choice of income and growth funds. They can choose from a range of 31 internal funds and 51 external funds managed by 12 industry-renowned fund managers such as Invesco Perpetual, Merrill Lynch, Schroders and Threadneedle. The external funds include three funds of funds managed by IMS Ltd.