The Lemon Fool

Sorry if this is covered elsewhere, but i can't search for investment bond as the words are too common!
I have an investment bond [unit based investments linked to a peppercorn life insurance] from Prudential and am interested to know if it is worth taking the 5% annually [tax-deferred] or better to leave it in and let it compound?
Grateful for help or advice where to post this.
Cheers

gbalin wrote:Sorry if this is covered elsewhere, but i can't search for investment bond as the words are too common!
I have an investment bond [unit based investments linked to a peppercorn life insurance] from Prudential and am interested to know if it is worth taking the 5% annually [tax-deferred] or better to leave it in and let it compound?
Cheers

The board "Does anybody Know?" is a possible starting point.

Whether you take the return of captial or not would depend on whether you need the income. With regard to taxation, taking the 5% might work for you if a higher rate taxpayer. Prudential will be liable to tax in the underlying fund, so there's no additional tax on basic rate players.

I have a feeling that you can withdraw the 5% for 20 years, effectively withdrawing your capital, but what is left after that is all counted as capital gain. My experience is over 30 years old, so DYOR.

TJH

Thanks both. That sort of clarifies my thoughts - the capital gain will be worse [better?!] if left to compound, and the idea was to take income, so that is what I think I'll do. After a bit more digging.

tjh290633 wrote:I have a feeling that you can withdraw the 5% for 20 years, effectively withdrawing your capital, but what is left after that is all counted as capital gain. My experience is over 30 years old, so DYOR.

TJH

Not a capital gain. A "chargeable event", and it will generate Income Tax, if it generates anything. This is the wonderful world of top-slicing ( if that term rings any bells ).

For the committed ( and this is a randomly picked exposition ) - https://www.mandg.com/wealth/adviser-se ... able-event