What changes have been made?

We have made the decision to introduce new series of With-Profits on our Flexibond product from the 2nd October. These series will have increased charges and a different annual bonus rate. This change will only impact you if you make additional investments into the With-Profits fund or switch into the With-Profits fund on or after 2nd October 2017 from a Flexibond policy that was taken out before 22nd May 2017.

How do these changes affect me?

If you have a Flexibond product that was taken out before 22nd May 2017 then after the 2nd October 2017 if you make additional payments or switch into the With-Profits fund option then this money will be invested into the newly created series that carries an increased charge and a different annual bonus rate. Any money that was invested prior to the 2nd October 2017 is unaffected and remains invested in the original series of With-Profits. Additionally if you have a regular investment set up and this does not increase then this will continue to invest in the original series, any increase would be invested in the new series. All other funds available in this product will remain unaffected by this change.

What is the reason for this change?

Looking at how recent economic conditions could impact future bonus rates and how ongoing low interest rates have pushed up the cost of running With-Profits investments we decided we had to act to introduce new With-Profits series of units with increased charges and different annual bonus rate. Had we not acted it is likely that new money would have adversely affected the annual bonus rates paid in future on money already invested and we may have needed to increase the charge for all customers.

Making this change means we treat existing and future investments made by our customers fairly both in the bonuses they receive and the charges they pay. 

What changes have been made to switching?

You are still entitled to 12 free switches in a policy year, after that we retain the right to charge for further switches. Previously this charge was set at £100, but this has also been reviewed and lowered to £20. This figure will be reviewed every three years and may be raised in line with inflation (CPI). At present we are still not charging for additional switches.

What options are open to me?

If you are invested in the Flexibond product, this change does not affect your current investment; this continues to be invested in your selected funds. You can still change the funds you are invested in by completing a fund switch or pay more money into your plan, this can be invested in the same options as before but any new money invested after 2nd October 2017 into With-Profits will be allocated to the new series. If you have further money to invest and this decision affects your plans then you can call us on 0800 622 323 and then option 3 or contact your local NFU Mutual Financial Adviser.