Withdrawing cash from your Investment Bond (2024)

Things to consider before setting up withdrawals

You’ll need to think about the following:

• The amount you wish to withdraw, which could be:
  • a fixed amount.
  • a percentage of the current value.
  • a percentage of the original sum invested.

• The frequency of withdrawals.

• When you want them to start.

• Whether you want to spread your withdrawals across all funds or detail which fund(s) the cash comes from.

Some plans offer alternative withdrawal options, for example distribution bonds will allow you to withdraw the distribution income while with-profits investments will allow you to align regular withdrawals with any annual bonus achieved within your plan – we’ll be happy to discuss these with you if you get in touch.

As an alternative to regular withdrawals, you could consider:

• Taking outpart of the planas a lump sum.
• Fully cashing inyour plan and closing it down.

How withdrawals could affect you

There are some important things to consider before making withdrawals:

• Withdrawals from the With-Profits Fund may result in amarket value reductionwhich can reduce the value of any withdrawals taken from the fund.

• Some bonds limit the amount you can take out through regular withdrawals.

• Withdrawals could create a tax liability- see ‘tax considerations’ below.

• Withdrawals could also impact your entitlement to tax credits and your personal allowance.

• If you’re invested in one of the PruFund protected funds any withdrawals will reduce your guaranteed amount.

Tax considerations

Whether withdrawals from your plan will result in a tax liability will depend on a number of factors including your personal tax position and the timing and amount of any withdrawals.

You can withdraw up to 5% each year of the amount you have paid into your bond without paying any immediate tax. This 5% limit is cumulative so any unused part can be carried forward to future years (the total can't be more than the amount paid in). If you take more than this you could create a tax liability.

There’smoreinformationin ourguide to tax on yourinvestmentbond.

You might need to pay tax depending on your circ*mstances and the options you choose. Tax rules can also change in the future. You may want to seek advice.