With-profits bond holders hit by exit fees
Just when you thought it could not get any worse we have today seen Norwich Union introduce exit fees for with-profits bond holders. The group had been the only one of the majors which had not introduced the charge before today, but now the whole sector is singing from the same hymn book.
The move will see with-profits bond holders hit by exit charges ranging from zero to twenty five percent depending upon the state of the market at the time they choose to cash in their investment. This literally is a body blow to thousands around the UK who have been saving for years for that rainy day which arrived a few short months ago. Encouraged to look at with-profits bonds because they were safe and steady investments, many investors are angry that they are being hit with such large exit fees at a time when money is so tight.
However, when you consider the state of the investment markets over the last few months it is no surprise that with-profits bond holders have been hit with the charge. After all the insurers need to make sure that no investor takes more than their fair share from the pot.
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