This page relates to the Windsor Life With-Profit Fund only.

An MVR is a reduction to the amount paid out from a with-profits policy, or switched from a with-profits fund. It is used to protect the interests of policyholders who remain invested in with-profits.

In the Windsor Life With-Profit Fund an MVR can only be applied to a unitised with-profits (UWP) policy and not to a conventional with-profits policy. If an MVR is applied to a policy it will pay out less than the value of its units.

Although we are not currently applying an MVR, please read below to learn when and why one might be applied in the future:

When investors leave the with-profits fund during extreme market conditions like we saw in late 2008 and early 2009, we may need to reduce their policy payout to make sure they do not receive more than their fair share of the fund.  This is often done by applying an MVR.

A simple example of why this might be appropriate is as follows:

  • Suppose we have only three investors in the with-profits fund whose policies are each worth £10,000, meaning that the total value of the fund is £30,000.
  • Now suppose the value of the fund falls by 10%, reducing the total value of the fund to £27,000.
  • If bonus rates are unchanged, and one investor then chooses to take his policy benefits of £10,000 without us applying an MVR, only £17,000 would be left in the fund to share between the remaining two investors.

Assuming the investor who is leaving is doing so at a time when an MVR could apply to his policy, we may apply an MVR of 10% to make his payout the ‘fairer’ value of £9,000.

You can find more information about how MVRs are applied to UWP policies in the Windsor Life With-Profit Fund in our Principles and Practices of Financial Management (PPFM) document, which is available here.

There are certain instances where we will never apply an MVR, such as death, maturity (of an endowment policy), taking pension benefits at your originally-selected retirement date, or payment of a regular withdrawal that was set up when the policy started.

Below are the general circumstances where an MVR may or may not be applied, but the policy information you received when your policy started will describe the full range of times when an MVR will not be applied.  Please see your policy type below, to find out more.

MVR may be applied

  • ​Taking retirement benefits before the originally-selected retirement date
  • ​Pension transfer to another company before or after the originally-selected retirement date
  • ​Pension transfer to another company which is not an Open Market Option
  • ​Switching funds from the unitised with-profits fund to another investment fund

MVR may not be applied

  • ​Death of policyholder
  • ​Taking retirement benefits at originally selected retirement date
  • ​Taking retirement benefits after originally selected retirement date
  • Pension transfer to another company made under the Open Market Option at the originally-selected retirement date​

MVR may be applied

  • ​Full surrender of policy
  • ​Partial surrender of policy
  • ​Switching funds from the unitised with-profits fund to another investment fund

MVR may not be applied

  • ​Death of policyholder

MVR may be applied

  • ​Full surrender of policy
  • ​Partial surrender of policy
  • ​Switching funds from the unitised with-profits fund to another investment fund

MVR may not be applied

  • ​Death of policyholder
  • ​Maturity of policy

MVR may be applied

  • ​Full surrender of policy
  • ​Partial surrender of policy
  • ​Switching funds from the unitised with-profits fund to another investment fund

MVR may not be applied

  • ​​Death of policyholder

MVRs could be applied at any time, and you should call 0800 073 1777 to check before you surrender or transfer your policy.

The table below shows the current MVRs in the Windsor Life With-Profit Fund that may be applied:

Product

Market Value Reduction (% of fund)

Date applied from

All products

Nil N/A

The value of investments can fluctuate and isn’t guaranteed.  You should also note that past performance isn’t necessarily a guide to how investments may perform in the future.