Guaranteed Capital Bond - Frequently Asked Questions (FAQs)

What is the LV= Guaranteed Capital Bond?
Can I invest?
Where is my money invested?
Can I guarantee my investment?
How often can I buy a new guarantee?
Can I take money out?
What about tax?
Can I change my mind?
What are the charges?
What might I get back?
What do I do if I'm not sure if this product is right for me?
Will I become a member of Liverpool Victoria Friendly Society and what will this mean to me?

This is a longer term investment, designed to offer you potential growth and some protection from the daily ups and downs of the stock market.  As it is a stockmarket related investment, the value of your bond can go down as well as up, and you are not certain to make a profit.

To invest in the Bond, you must be aged 17 to 69 and be a UK resident. You can’t apply if you live in the Channel Islands or the Isle of Man.

You can invest £5,000 or more up to a maximum of £500,000

Your money will be invested in our Growth Fund which invests in a range of carefully selected stocks and shares, together with some commercial property and fixed interest investments. These are carefully managed by our dedicated team of investment professionals with the aim of delivering strong long-term growth.

We also try to give you some protection from the day to day rises and falls of the markets the Growth Fund invests in.

To provide some stability, we use the average value of your bond over the previous 26 weeks.  This protects you from some of the short term ups and downs in value associated with these types of investments.  There are situations where this may not apply (e.g. for the first 26 weeks of your Bond), please see What is Fund Protection? for more details.

You will have an initial Guarantee. The guaranteed amount will be your original investment, less any withdrawals you make. The Guarantee will only apply on the day the Guarantee period ends (5 years after you take out the Bond, or 5 years after you bought any new Guarantee), not throughout the whole Guarantee period. Therefore if you cash in your investment before or after the end of the Guarantee period you may get back less than you invested.

We will check the value of your Bond on the 5th anniversary of you buying the guarantee. If it is worth less than it was when you bought the guarantee, we will work out the difference (less any withdrawals you have taken) and add this back to your Bond. We will do this even if you decide not to cash it in.

The initial guarantee only lasts for 5 years from the date you purchase it, after which you can purchase a new guarantee if you wish.  The cost of the new guarantee will be based on the guarantee charges in force at the time.

You can buy a new guarantee any time after you have had your Bond for 12 months. Any new Guarantee you buy will automatically replace any existing Guarantee as you can only have one Guarantee at any one time. The cost of the new guarantee will be based on the guarantee charges in force at the time, and the charges will last for a further 5 years.

You can buy a new guarantee once each year without incurring an administration charge but if you do this more often, we will charge you £25 each time.

You can take money out of your Bond but this will lower its value. If you do this in the first five years there may be an Early Encashment Charge. If you just want to withdraw money once in a while, the minimum is £250, but you must leave at least £500 in the Bond. During the first year of the investment, you may only take one such withdrawal.

You can't take regular withdrawals during the first year of the investment but if you want to withdraw money on a regular basis after the first year, you can take £50 or more on a monthly, quarterly, half yearly or yearly basis. If you take withdrawals from your investment, this will eat into your original investment if the amount is more than the growth on your Bond. If you take all the money out of your Bond, we'll close it.

You won't have to pay any Capital Gains Tax or Basic Rate Income Tax on money you take out of the Bond. LV= has already paid tax on its income and gains (you cannot reclaim this tax).

If you are a higher rate tax payer or the gain from your bond takes you into the higher rate tax bracket, you may have more tax to pay on the proceeds of this investment.

If you qualify for Age Allowance or Government Tax Credits you could lose some or all of these benefits as a result of any profits from cashing in your Bond. We will tell you if there is a gain on which you might need to pay tax.

Tax treatment depends on your personal circumstances. Any references to taxation are based on our understanding of current legislation and HM Revenue & Customs practice, which is subject to change.

Please contact us if you need more information as this will depend on your individual tax position.

Yes. After we have set up your policy we will send you a notice reminding you of your legal right to change your mind within 30 days of receiving the notice. Just send us back your 'Right to Cancel' form, which will be with your Bond documents, within 30 days and we'll refund your money.

After this notice period, you can cancel the Bond at any time but you may then get back less than you invested.  We will apply an Early Encashment Charge during the first 5 years of your investment.

All charges are taken by taking units away from your Bond.

This is 0.083% each month (equivalent to 1% a year) of the fund value.

We make an additional charge for five years. This is added to the Monthly Management Charge. The current charge for this offer is 0.083% each month (the equivalent of 1% each year) of the value of the fund. This is described in more detail in the Key Features document

You'll get back the amount your Bond is worth when you cash it in.
 
The amount you get back will depend on:

• the amount you invested
• how well our investments have performed
• the profits or losses the Society has made
• our charges
• any money you've already taken
• whether you have bought a guarantee
• tax

If you need advice about whether or not this plan is suitable for your needs, please contact us, you can find the telephone number you need here. Advice is provided on the investment, protection and pension products and services of the Liverpool Victoria group of companies only.

Yes, you will automatically become a member of Liverpool Victoria Friendly Society Limited. We are a mutual society and committed to remaining so. This means that we have no shareholders to please – so the profits we make are used for the benefit of our members. In addition to your right to a say in how the Society is run (after beeing a member for at least 12 months), membership entitles you to a range of attractive member benefits and you will receive details once your application is accepted.