How our Bonus Builder Child Trust Fund works
Our Bonus Builder Child Trust Fund is a With Profits Policy
When you apply for a Bonus Builder Child Trust Fund, we set up a policy for your child. When we receive gifts for your child we use that money to add units to the policy. The way we do this is to divide the amount of money we receive by the price of a unit on the day we receive it.
Example of a £50 gift paid in to a Bonus Builder Child Trust Fund
If the Unit Price was £1.25 on the day we receive £50 for your child's account, we would divide the £50 by £1.25. This equals 40 so we add 40 units to your child's policy.
The plan then grows by the addition of regular bonuses which are reflected in the unit price. You can find the price of our units in the Financial Times or on our website.
Smoothing the ups and downs of the Stockmarket
To provide stability over time, we hold back some of the investment returns in good years to make up for when investment performance isn't so good. This smoothing effect allows the investment performance of the Bonus Builder Child Trust Fund to be cushioned from the daily rises and falls of the stock market. Investors in funds that don't smooth returns could see the value of their investments rise or fall faster than those in a smoothed fund.
We reserve the right to apply a Market Value Reduction in certain circumstances such as due to the impact of very bad investment conditions. This would result in our reducing the amount we pay you. If applied this may reduce the value to less than the amount paid in.
See the Key Features document for more information.
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