PMAS Platinum Bond
Product information
For many investors, it’s important to remain
flexible. If you have a lump sum to invest, the PMAS Platinum Bond
offers you a choice between investing for growth or investing for
an income – a regular partial surrender of your investment.
You can choose to swap between income and
growth at any time. Remember that any payment you take as income
will reduce the total amount you’ve got invested.
Invest for growth
As an investment for growth, the Platinum Bond
gives you peace of mind by smoothing short term ups and downs of
the stock markets, while still giving the potential for long term
growth.
- Funds are invested in the Police Mutual with-profits fund.
The Platinum Bond offers potentially high-returns on your capital,
and guarantees on key plan anniversaries. Whilst there is potential
for high-returns, you should remember you may get back less than
you invest
- Although the plan is flexible you should
think about investing for the medium to long term – at least five
years
Invest for income
Your income comes from a regular partial
surrender of your investment. If you take an income from your
investment, there’s no guarantee you’ll get your initial investment
back – unless you opt to take your bonuses as income and then cash
in your bond on the tenth or subsequent fifth plan anniversary.
- Choose how to take your income. It can
be:
- a percentage of the amount
invested
- a
fixed cash amount
- an amount equal to the regular
bonus that may be added
each year (depending on
the performance of the fund)
- You can change the amount you take as income
at any time – with certain restrictions if you take your bonuses as
income
- Take the income monthly or yearly, and can
stop and start at any time
- At the beginning of the plan (and only at the
beginning) you can choose to receive the bonuses as an income. This
will mean you’re still guaranteed your initial investment back on
the tenth, fifteenth, twentieth or subsequent five-year plan
anniversaries, or on your death. If you take income other than just
the bonus, then the option to receive just bonuses will no longer
be available. Remember the income you receive from bonuses may go
up or down
- If you take an income higher than the
bonuses, you are not guaranteed to get your initial investment
back
- The income is treated by HM Revenue &
Customs as a regular partial surrender. They allow you to take up
to 5% of the initial investment each year for up to 20 years
without paying capital gains tax. Tax may be payable on amounts
above that level, although this will depend on your tax status at
the time
- We allow you to take an income of up to 7.5%
of the initial investment each year without a surrender charge or
application of a market value reduction (MVR, which is explained
below). Income above this level is permitted, but surrender charges
or an MVR may be applied on the excess
- Income is paid direct to a bank or building
society account
Bonuses
The PMAS Platinum Bond may pay bonuses in two
ways; regular and final. Potential bonuses depend on the
performance of the fund.
- The regular bonus rate is a
percentage of the amount invested and previously added bonuses. It
is allocated throughout the year at a rate normally set in
advance
- A final bonus may be added
when the bond is cashed in or if you die, and reflects any capital
growth which has not been allocated as regular bonuses
How we invest
The fund invests mainly in a mix of company
shares, property, bonds (a type of loan to governments or
companies) and cash.
Because we have no shareholders, we can make
your money work even harder for you.
Cashing in early
The flexibility of the PMAS Platinum Bond
means you can cash it in any time you want, but there might be
penalties associated with this.
On cashing in on the tenth, fifteenth, and so
on anniversaries, you are guaranteed to receive
at least your initial investment, plus any bonuses
you might have earned - minus any income you’ve taken over the
years.
If you want to cash in your bond in times of
unfavourable market conditions, we reserve the right to impose a
market value reduction (MVR) to protect the
interests of remaining investors. This will reduce the amount you
receive.
The MVR will not be applied
in the following circumstances:
- On the tenth, fifteenth, twentieth or
subsequent five-year plan anniversaries
- On income up to 7.5% of the initial
investment a year
- If you die
If you cash in your investment (either
completely or in part if the partial surrenders are greater than
7.5% of the initial investment for one policy year) within the
first five years, you’ll be charged a percentage of the amount you
cash in.
| Year of
surrender |
1 |
2 |
3 |
4 |
5 |
After 5 years |
| Surrender charge |
5% |
4% |
3% |
2% |
1% |
0% |
If both an MVR and a surrender charge apply, we’ll charge you the
greater of the two – not both.
Limits
- The minimum initial investment is £1,000 and
the maximum £250,000
- If you already have a PMAS Platinum Bond you
can start a new one from £500
- The minimum income payment you can receive is
£50
- At least £500 must be left in the bond after
any withdrawal
- All investments are made by cheque
- The minimum start age is 16, the maximum
85
The PMAS Platinum Bond and tax
- For a basic rate taxpayer, no further tax is
payable on the proceeds of your fund as tax has already been paid
on the underlying fund
- Higher rate taxpayers or borderline higher
rate taxpayers may need to pay further tax based on the profit made
over the life of the bond:
- partial
surrenders, or income, of up to 5% a
year (for up
to 20 years) are treated as
return of capital, not profit, so
no tax is due at the time of
surrender
- the tax rate will be no more that the
difference between
the savings rate and the
higher tax rate
- You may be able to control your tax bill by
choosing when you cash your bond in - tax is only calculated at the
date of surrender or partial surrender if you’re drawing more than
5% a year
- Non-taxpayers cannot reclaim the tax paid on
the investment. If you don’t pay tax, you could consider deposit
account investments where returns can be paid gross. However, if
you’re looking to invest in stocks and shares then the PMAS
Platinum Bond could still be right for you
- If a gain arises on cashing in when you are
65 or older, your age allowance may be reduced, although not below
your personal allowance
- If the value of your estate when you die is
more than your individual allowance there may be inheritance tax to
pay
- Tax legislation may be subject to change
- If you’ve got any doubts or questions, talk
to an independent financial advisor
Protection for life
The bond can be taken out on a single life or
joint life, last survivor basis. Joint investors must be married
and once the plan is set up the lives insured cannot be
changed.
- For joint investment, if either investor dies
the plan continues on a single life basis. If the first named
investor dies first, ownership transfers to their estate. It’s
important to make a will where the beneficiary is stated. If the
second investor dies first, ownership of the plan remains with the
first investor
- At least 101% of the value of the bond is
paid out in the event of death, and no MVR or surrender charge will
apply
How to apply
Before applying make sure you read the
key features and product information pages on
this site.
You can:
You will need to have your bank details handy
and it will take no more than ten minutes to apply.