The value of my with profits investment has just fallen, why?
As an investor in our with profits fund your investment has two separate values. The first is your current value, and this is the one you will have noticed that as has fallen.
The second is your guaranteed future value, also known as your unit value. You will notice that this hasn’t actually fallen, indeed that is currently growing on a daily basis, currently 0.5% a year in the Scottish Friendly Unitised With Profits Fund used in My Plans.
This is the minimum value that your policy is guaranteed to be (no matter what the current value) if you cash in or switch out your with profits investment on a specified date in the future (usually 10 years from the date that you took out your plan).
Your current value has fallen as it broadly reflects the current values of the assets backing your with profits investment. Whilst we aim to smooth out the day to day volatility in the markets that can’t protect values from the dramatic and sustained falls we’ve recently seen in the stock, bond and property markets.
Clearly if the markets rebound in a sustained way then you will notice that, after the effects of our smoothing, your current investment value will increase. But equally if they continue to fall then this will be reflected in your current value.
However your future guaranteed value will not fall and you have the comfort of knowing that no matter what the position of the markets you will have the assurance of this guaranteed minimum value.
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Scottish Friendly is a mutual ran for the benefit of it's members. We're dedicated to the efficient provision of financial products and services.