Investors face with-profits blow

policyholders in with-profits bonds could lose out if other investors encash their policies

Policyholders remaining in with-profit bonds stand to lose out if other investors take advantage of special policy clauses that allow them to encash their policies without a market value reduction (MVR) penalty. Some with-profit bonds have a clause in their policy conditions that allows policyholders to exit their investment without the usual penalties on specified dates. However this may leave remaining investors holding policies with later MVR-free dates out of pocket, the very outcome groups had sought to avoid by applying MVRs in the first place. Simon Farrant, product research ma...