Partial encashment of with-profits bond

[Sue_Dee]

My mother has a with-profits bond that has just reached a 10 year anniversary (there is no end date to the bond). She would like to encash 50% of the value of the bond (approx £17k) and has been given the option of a partial or segment encashment. She is a pensioner with a state pension and no other source of income though she does have some savings.

Any advice as to the best option for her situation would be greatly apprecited. Many thanks, Sue Dee

[tax_schmax]

The adviser that sold the policy owes your mother some responsibility. I'd ask them in the first instance.

If you have no joy, provide more details;
when the policy was arranged,
how much was invested
how much has been taken in withdrawals

You may want to know that such policies have been paying vastly reduced bonuses of late, and that many companies have been applying penalties on withdrawals or surrenders, called Market Value Reductions (MVR or MVA). Most providers also have a 10 year penalty free withdrawal or surrender feature. It would be worthwhile getting this information as an ISA may be more tax efficient and perhaps simpler for your mother to understand.

[King_Maker]

IME, segment encashment is usually preferable to part surrender.

There should be no Income tax liability - unless it's an Offshore Bond.