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NU cuts MVR by a quarter

Norwich Union is slashing average market value reductions by 25 per cent from 8 per cent to 6 per cent on with-profits policies that are encashed early.

The change only applies to money invested between 1998 and 2002 as investments outside this period do not suffer an MVR.

NU says the move reflects improved, more stable market conditions.

Chartwell Investment Management business development manager Ben Willis welcomes the change.

He says NU is probably hoping that if investors do encash their funds now the barrier is lowered, they will want to invest it somewhere else with NU.

NU senior actuary David Riddington says: “This continues the process of gradually managing out MVRs as investment conditions allow. It means we are now only applying MVRs on money invested between 1998 and 2002 inclusive.”

Willis says: “NU seem to be getting it right in terms of some of the things they have done such as most recently bringing MVRs down. You would expect that of a fund with their equity exposure. They are sending out the right message and showing their commitment to with-profits.”

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