A Market Value Reduction or MVR is designed to protect Members who are not taking their money out of the Society's With Profits fund and ensures that you receive your fair share.
MVRs are only applied in exceptional circumstances and could reduce the level of the payout that you would receive if you withdrew your money or surrendered your policy with the Society outside of your MVR free dates.
At certain times we may apply a MVR to bring the overall payout of a withdrawal or surrendered policy closer to the asset share when the underlying value of the assets in our fund is lower. We do this to ensure that:
- The surrender value of a policy is not unfairly higher than the market value of the assets in the fund; and
- to protect the remaining Members by making sure that a fair share remains.
We will let you know if we are applying a MVR when you ask for a surrender value or request a partial withdrawal, but this can change at any time if there is a sudden drop in the value of assets in the fund.
A MVR may be applied to an Investment Bond or Investment ISA on:
- A partial surrender (withdrawal).
- A full surrender.
- Taking regular withdrawals above certain limits.
- Transferring to another provider (ISAs only).
A MVR may be applied to a Junior ISA or Non-Stakeholder CTF when:
- Transferring to another provider.
We only apply a MVR if you surrender your investment outside of your MVR free dates or if you make a partial withdrawal above certain limits.
You can find your MVR free dates within your policy documents. If you can’t locate this, please contact the team who can help you further.
Currently, for all Kingston Unity products that are affected by the MVR will see a 5% penalty incurred.
No. A MVR is only applied to funds that are being withdrawn outside of MVR free dates or over and above the withdrawal limits allowed. MVRs are not permanent and can be introduced or withdrawn at any time.
Keep an eye on this web page for notification that the MVR has been removed. If you are unsure, you can also contact us and we can tell you if a MVR would apply to you at that time.
For Investment ISAs
You can make partial withdrawals of £500 or more. In these adverse conditions, we have applied a Market Value Reduction if you withdraw more than 10% of the value of your Investment ISA, If you are unsure what this means to you, please contact the team who will be happy to help.
For investment Bonds
If you make a withdrawal using your penalty free withdrawal allowance at a time when market values are very low, such as now, we may apply a Market Value Reduction (MVR) to your Bond.
A MVR free date is a date when any MVRs that are currently active will not apply to your policy. MVR free dates differ between policies:
We guarantee to pay out 101% of the initial investment, plus any bonuses, less any withdrawals already made, on the 10th anniversary of the investment or each subsequent 10th anniversary after that.
Please note that withdrawals must be made within 7 days of the initial anniversary and within 30 days of any subsequent anniversaries. Some older Investment Bond products may have slightly different MVR free terms. Please get in touch if you need more information about your specific Investment Bond.
On the 10th anniversary or each subsequent 5th anniversary after that, we guarantee you will be able to withdraw all the money paid into your ISA as well as all bonuses added, less withdrawals already made.
No. Markets rise and fall and the concept of With Profits is to weather market risks by investing in a range of different assets to ensure a smoothed return on the investment of all Members.
MVRs are designed to ensure fair returns to all Members during periods of extreme stock market volatility. They are not an indicator the Society is failing.
We believe our approach and experience in investing for the long-term will benefit those we serve as a mutual organisation. The With Profits fund has always been a diversified mix of assets managed with a cautious mindset, which despite heavy stock market falls, has acted robustly in these uncertain times.
This doesn’t apply to all Kingston Unity products. A MVR will apply to Kingston Unity Investment Bonds and Investment ISAs.
No. A MVR does not affect any potential future returns from market performance.