Scottish Widows Flexible Options Bond and Flexible Investment Bond

• You can switch funds free of charge. We offer a wide range of funds to switch between.
• You can receive a regular income. However, if you choose to withdraw more than your 5% tax deferred allowance per year, this will create a chargeable event gain and a possible income tax liability.
• You can leave your Bond invested for as long as you like.
• It has additional benefits such as life assurance. So, if you die your beneficiaries will receive 101% of the Bond’s value.

• Switching funds means moving the investment you have in one fund to another.
  
• A beneficiary is anyone you choose to leave your money to.
• It’s important to remember the value of your investment and any income isn’t guaranteed, your investment can go down as well as up. So, you might get back less than you invested.

If you’ve not reviewed the fund or funds in your Bond for a while, it’s a good idea to take some time to consider if they’re still right for you. 

Here are two things you can do: 

• Find out how much your Bond is currently worth.
  Every year we’ll send you an annual statement, which will tell you how much your Bond is currently worth. Or you can call us for a valuation on 0345 366 7725.  We’re available Monday to Friday 9am to 5pm.
• Look at the funds you’re invested in to see if they’re still suitable.  Your annual statement shows which funds you’re currently investing in. You can find out more about these funds and other available funds at List of available Scottish Widows Life Fund, you’ll need to select Brand as Scottish Widows and category as Life Funds.
  

Here you’ll find fund factsheets, which give information about each fund and its aim - what the fund is trying to achieve by how it’s invested.

Consider the aims, risks and charges of the funds and decide if these still meet your investment needs. You can see the fund charges on funds available to your plan at www.scottishwidows.co.uk/funds/fund-charges

• It’s important to think about how much risk you’re willing or able to take with your investments as this can change over time. 
  
• If you’re invested in the With Profits Fund, a Market Value Reduction (MVR) may apply if you leave the fund.
  A Market Value Reduction (MVR) is a reduction we sometimes make to payouts, for example, after a period of falling stock markets.
• If you switch your investment out of with-profits, you can’t switch back in to with-profits in the future. For more information, please visit www.scottishwidows.co.uk/existingcustomers/with-profits.html

Call us on 0345 366 7725.  We’re available Monday to Friday 9am to 5pm. We’ll be happy to help you, but we can’t offer you financial advice or give you recommendations about what to invest in.

You can take regular or single withdrawals from your Bond. Call us on 0345 366 7725.  We’re available Monday to Friday 9am to 5pm. 

Single withdrawals

Your Bond is made up of 20 segments. Single withdrawals can be taken by cashing in these segments. With a flexible options bond you can also take an equal amount from each segment or do a combination of both.

Minimum withdrawal amount of £500 applies.  You’ll have to leave a minimum amount of £100 in each remaining segment otherwise we’ll close it, cash in the remaining segments and pay you the proceeds.

Regular withdrawals

You can take a regular monthly, quarterly, half-yearly or yearly withdrawal of either a specified amount or a percentage of your investment. This will be paid directly into your bank or building society account. If you’re taking regular withdrawals within a plan year these can’t total more than 7.5% of the total amount invested in your plan.

Minimum withdrawal amount of £30 applies.

Once we have all the information we need to proceed with your request, a payment will be made to the bank or building society account we have for you. Payments can take three to four working days to clear.

Withdrawals from the With Profits Fund above a certain level may be subject to Market Value Reductions (MVR). For more information on with-profits, please visit www.scottishwidows.co.uk/existingcustomers/with-profits.html 

Things to consider when taking withdrawals:

• Taking withdrawals will reduce the value of your Bond which will reduce the amount of investment growth you may receive
• Any withdrawals you take could be greater than any growth the Bond has made.  This could reduce the value of your Bond to below the amount you originally invested
• You may have income tax to pay when making a withdrawal
• The value of your Bond will be reduced if the charges are more than the amount of growth in the investment funds that your Bond invests in.

Withdraw all of your investment 

Call us on 0345 366 7725. We’re available Monday to Friday 9am to 5pm. 

We don’t charge an exit fee.

There may be tax to pay when you take money out of an investment bond. The most common ways in which this may happen are:

• Withdrawing all of your investment
• Taking withdrawals worth more than 5% of the overall value of your investment  
• If you sell or transfer ownership of your Bond to someone else – this is sometimes referred to as an “assignment for money’s worth”
• The death of the life assured.

The tax you might have to pay will depend on your personal circumstances. This guide (PDF, 127KB) will help you understand how investment bonds are set up and how the different ways you take your money can affect how much tax you pay. We would always recommend that you seek advice before doing anything that could cause a tax liability.