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Six ways to use the LV= Flexible Guarantee Bond

The flexibility and unique features of the Flexible Guarantee Bonds means it can be used in a variety of ways as an investment vehicle for your clients.

We’ve set out six of these below – if you’d like more information, and want to discuss options for a specific client, speak to your usual LV= sales contact

A simple low cost investment

  • At a basic level, the Flexible Guarantee Bond provides a straightforward investment option for your clients. The smoothed returns give a level of protection against market volatility

A secure investment

  • Along with the level of security provided by the built in averaging mechanism, the optional capital guarantee option gives even more protection against downside loss over a fixed period.
  • At the end of the selected guarantee period, the value of the fund is guaranteed to be no lower than the value at outset – and if the value has gone up, the client will get this higher value.

Life stage planning

  • The optional guarantee, with choice of guarantee terms of 8, 9 and 10 years (depending on fund choice) means the FGB is an ideal option for life stage planning – earmarking specific funds for certain planned events, in the knowledge that there is a guaranteed minimum that the investment will be worth - with the potential for investment growth as well.

Tactical investment

  • The guarantee option provides the ability to lock in growth after a market rally. The flexibility means that the guarantee can be stopped and renewed at any time, thereby giving the option to lock in a higher value if markets rise.


Mr Stevens invests £40,000 in an FGB and opts for a 10 year guarantee at outset. After two years, his fund is worth £45,000, so he stops the original guarantee and starts a new one for a new ten year period, guaranteed the new £45,000 value.

Tax planning

  • There is no Capital Gains Tax on withdrawals from the Flexible Guarantee Bond. Higher rate taxpayers can withdraw 5% each year, paying just basic rate tax.

IHT planning

  • The Flexible Guarantee Bond can be written on a joint or single life basis and by placing the bond in trust; clients can effectively reduce their IHT liability for dependents on death.

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