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What future for &#39no MVA&#39 pledges?

I read with dismay the news of the decision by Royal & Sun Alliance and Scottish Mutual to remove the 10-year non-MVA guarantees on their with-profits bonds.

The reasoning given implies that Royal & Sun Alliance may also retract their promise notto apply an MVA on annual encashments of up to £25,000.

The application of an MVA removes the implicit guarantee that otherwise distinguishes these investments from their volatile unit-linked cousins.

It is to be hoped that Clerical Medical, Prudential, Norwich Union and NPI – the other providers currently making a “no MVA” promise – keep their nerve and retainthis valuable and distinguish-ing aspect.

Alan Lakey

Partner,Highclere Financial Services,

Hemel Hempstead,

Herts

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