You can take income withdrawals of up to 5% of the initial investment each year, without any immediate tax implications (see below), until the total you have withdrawn equals the initial investment amount. Once you have made withdrawals equal to your initial investment this allowance stops. Any of this annual allowance that is unused can be carried forward to future years so, for example, if you have not made an income withdrawal from your bond in the first five full years since issue, you could take up to 25% as a partial withdrawal (without any immediate tax implications).
You can choose the amount you would like as annual income of between 2% and 5% and this will be paid directly to your bank account. You choose when you would like to be paid, either monthly, quarterly, half yearly or annually.
Please note that the minimum investment for taking monthly income withdrawals is £10,000.
The minimum investment for taking a withdrawal of under 2% is £30,000. For any withdrawal under 2%, please contact the office.
Taking a lower amount as income will allow greater opportunity for capital growth over the years as there is always the risk that your chosen amount of income withdrawal could reduce the value of your bond to an amount less than you originally invested. For example, if you choose to withdraw 5% per annum and the bonuses added are less than 5% per annum, your initial investment would fall.
Not looking to take an income? Take a look at our Investment Bond.