Norwich Union is to introduce a new inflation-protected guarantee for with-profit fund investments made in the Portfolio investment bond after 30 January 2006.
- Market-leading feature protects against stock market falls and inflation
Norwich Union is to introduce a new inflation-protected guarantee for with-profit fund investments made in the Portfolio investment bond after 30 January 2006.
This unique guarantee protects customers’ original investments and tracks the retail price index (RPI). The guarantee means that investors who keep all their money invested for at least five years will either benefit from the growth in the with-profit fund or at least get back at least what they paid in – plus inflation. Offshore investors will track a different inflation index (see notes to editors).
The strength of the with-profit fund enables Norwich Union to offer this valuable guarantee. The guarantee is available at no extra charge to investors.
Mike Kirsch, commercial and marketing director at Norwich Union, said: “This is a great new feature that should appeal to customers because it allows them to benefit from potential growth in our with-profits fund while protecting the value of their initial investment. It means that customers who remain fully invested for at least five years will get their money back in real terms regardless of what happens to investment markets and inflation.
“Customers tell us that they want guarantees that protect the real value of their investment. This new feature demonstrates Norwich Union’s commitment to with-profits and we know of no other provider who offers a guarantee like this.”
The inflation-protected guarantee will be available through the Portfolio bond and offshore bonds after 30 January 2006. It applies to money held in the fund for at least five years and moved out in full on any subsequent date. Early exit penalties may apply if money is withdrawn from the bond before the 5 th anniversary.
The offer is available for a limited time only. Any withdrawals mean the amount guaranteed is reduced in proportion to the number of units cancelled.
In addition, an extra 1% special offer allocation will be introduced 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%.
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Press office contacts:
David Gwyer 01904 452828 Out of hours 07800 699508
James Evans 01904 452791 Out of hours 07800 699525
Rob Pell 01904 452659 Out of hours 07800 699563
Notes to editors:
How the inflation-protected guarantee might work
This example shows how the guarantee might work over a seven-year period.
| | Example 1 | Example 2 |
| Initial Premium | Ł10,000 | Ł10,000 |
| Value of With-Profit Fund after 7 years | Ł11,600 | Ł14,000 |
| Increase in inflation measure over 7 years | 19% | 19% |
| Guaranteed amount after 7 years | Ł11,900 | Ł11,900 |
| Value after seven years, if investment is fully moved out of With-Profit Fund |
Ł11,900 |
Ł14,000 |
| | Guarantee applies | Guarantee doesn’t apply |
About the retail prices index (RPI)
RPI is a measure of inflation. It is measured by taking a large number of prices, working out how much each price has changed and then weighting the price changes according to their importance. Norwich Union will use figures published by the Office of National Statistics.
If offshore bond investors are investing in dollar or euro funds, the guarantee will be linked to an appropriate index.
About the Norwich Union Portfolio investment bond
The Norwich Union Portfolio bond offers a flexible way to invest for growth or income. Its minimum investment is Ł5,000 and investors can choose to put their money in a selection of funds including with-profits, equity, distribution, property, bonds and cash, which are run by Norwich Union and other fund managers.
- Is simple and flexible - offering a wide choice of internal and external funds and a choice of two charging structures within a single bond
- Has clear and easy to understand charges - explicit charging provides investors with a clear picture of the charges applicable to their investment
- Offers investors the choice of income and growth funds. Investors can choose from a range of 31 internal funds as well as more than 100 funds managed by 12 industry-renowned fund managers.
About Norwich Union
Norwich Union is one of the UK's biggest insurers. It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. Financial advisers provide over 70% of the company's long-term savings business in the UK.
Norwich Union has strategic alliances with building societies and other leading UK brand names including CIS 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.